Creating a Culture for Change
We’ve considered how organizations can adapt to change. But recently, some OB scholars have focused on a more proactive approach—how organizations can embrace change by transforming their cultures. In this section, we review three approaches: managing paradox, stimulating an innovative culture, and creating a learning organization. We also address the issue of organizational change and stress.
Managing Paradox
Managers can learn a few lessons from paradox theory,32 which states the key paradox in management is that there is no final optimal status for an organization.33 In a paradox situation, we are required to balance tensions across various courses of action. There is a constant process of finding a balancing point, a dynamic equilibrium, among shifting priorities over time. The first lesson is that as the environment and members of the organization change, different elements take on more or less importance. For example, sometimes a company needs to acknowledge past success and learn how it worked, while at other times looking backward will only hinder progress. There is some evidence that managers who think holistically and recognize the importance of balancing paradoxical factors are more effective, especially in generating adaptive and creative behaviors in those they are managing.34
Stimulating a Culture of Innovation
How can an organization become more innovative? Although there is no guaranteed formula, certain characteristics—in structure, culture, and human resource (HR) policies—surface repeatedly when researchers study innovative organizations. Let’s first clarify what we mean by innovation.
Definition of Innovation
We said change refers to making things different. Innovation, a specialized kind of change, is applied to initiating or improving a product, process, or service.35 So all innovations imply change, but not all changes introduce new ideas or lead to significant improvements. Innovations can range from incremental improvements, such as tablets, to radical breakthroughs, such as Nissan’s electric LEAF car.
Sources of Innovation
Structural variables are one potential source of innovation.36 A comprehensive review of the structure–innovation relationship leads to the following conclusions:37
Organic structures. Because they’re lower in vertical differentiation, formalization, and centralization; organic organizations facilitate the flexibility, adaptation, and cross-fertilization that make the adoption of innovations easier.
Long tenure in management. Managerial tenure can provide the legitimacy and knowledge of how to accomplish tasks and obtain desired outcomes through creative methods.
Slack resources. Having an abundance of resources allows an organization to afford to purchase or develop innovations, bear the cost of instituting them, and absorb failures.
High interunit communication.38 These organizations are heavy users of committees, task forces, cross-functional teams, and other mechanisms that facilitate interaction across departmental lines.
Context and Innovation
Innovative organizations tend to have similar cultures. They encourage experimentation and reward both successes and failures. Unfortunately, in too many organizations, people are rewarded for the absence of failures rather than for the presence of successes. Such cultures extinguish risk taking and innovation. Innovative organizations have policies to actively promote the training and development of their members so they keep current, offer high job security so employees don’t fear getting fired for making mistakes, and encourage individuals to become champions of change. These practices should be mirrored for workgroups as well. One study of 1,059 individuals on over 200 different teams in a Chinese high-tech company found that work systems emphasizing commitment to employees increased creativity in teams.39 These effects were even greater in teams where there was cohesion among coworkers.
Idea Champions and Innovation
Once a new idea has been developed, idea champions actively and enthusiastically promote it, build support, overcome resistance, and ensure it is implemented.40 Champions often have similar personality characteristics: extremely high self-confidence, persistence, energy, and a tendency to take risks. They usually display traits associated with transformational leadership—they inspire and energize others with their vision of an innovation’s potential and their strong personal conviction about their mission. Situations can also influence the extent to which idea champions are forces for change. For example, passion for change among entrepreneurs is greatest when work roles and the social environment encourage them to put their creative identities forward.41 On the flip side, work roles that push creative individuals to do routine management and administration tasks will diminish both the passion for and successful implementation of change. Idea champions are good at gaining the commitment of others, and their jobs should provide considerable decision-making discretion. This autonomy helps them introduce and implement innovations when the context is supportive.42
Do successful idea champions do things differently in varied cultures? Yes.43 Generally, people in collectivist cultures prefer appeals for cross-functional support for innovation efforts; people in high power-distance cultures prefer champions to work closely with those in authority to approve innovative activities before work has begun; and the higher the uncertainty avoidance of a society, the more champions should work within the organization’s rules and procedures to develop the innovation.
Creating a Learning Organization
Another way an organization can proactively manage change is to make continuous growth part of its culture—to become a learning organization.44
What’s a Learning Organization?
Just as individuals learn, so do organizations. A learning organization has developed the continuous capacity to adapt and change. The Dimensions of the Learning Organization Questionnaire (DLOQ) has been adopted and adapted internationally to assess the degree of commitment to learning organization principles.45
Exhibit 17-5 summarizes the five basic characteristics of a learning organization—one in which people put aside their old ways of thinking, learn to be open with each other, understand how their organization really works, form a plan or vision everyone can agree on, and work together to achieve that vision.46
Exhibit 17-5
Characteristics of a Learning Organization
Source: Based on P. M. Senge, The Fifth Discipline: The Art and Practice of the learning Organization (New York: Doubleday, 2006).
Managing Learning
What can managers do to make their firms learning organizations? Here are some suggestions:
Establish a strategy. Management needs to make explicit its commitment to change, innovation, and continuous improvement.
Redesign the organization’s structure. The formal structure can be a serious impediment to learning. Flattening the structure, eliminating or combining departments, and increasing the use of cross-functional teams reinforces interdependence and reduces boundaries.
Reshape the organization’s culture. To become a learning organization, managers must demonstrate by their actions that taking risks and admitting failures are desirable. This means rewarding people who take chances and make mistakes. Management needs to encourage functional conflict.
Organizational Change and Stress
Think about the times you have felt stressed during your work life. Look past the everyday stress factors that can spill over to the workplace, like a traffic jam that makes you late for work. What have been your more memorable and lasting stressful times at work? For many people, they were those caused by organizational change.
Not surprisingly, we also find the role of leadership is critical. One study indicates that transformational leaders can help shape employee affect so employees stay committed to the change and do not perceive it as stressful.47 Other research indicates that a positive orientation toward change before new initiatives are planned will decrease employees’ stress when they go through organizational changes and increase their positive attitudes. Managers can continually strive to increase employees’ self-efficacy, change-related attitudes, and perceived control over the situation to create this positive change orientation. For instance, they can use role clarification and continual rewards to increase self-efficacy, and they can enhance employees’ perceived control and positive attitudes toward change by including them throughout the planning stages to the application of new processes.48 Another study adds the need for increasing the amount of communication to employees during change, assessing and enhancing employees’ psychological resilience through offering social support, and training employees in emotional self-regulation techniques.49 Through these methods, managers can help employees keep their stress levels low and their commitment high.
Watch It
If your professor has chosen to assign this, go to the Assignments section of mymanagementlab.com to complete the video exercise titled East Haven Fire Department: Managing Stress.