Bachelor Thesis Organization & Strategy Organizational behavior The influences of an organizational change on organizational culture

TILBURG UNIVERSITY Bachelor Thesis Organization & Strategy Organizational behavior The influences of an organizational change on organizational culture 11-06-2010 Student: José Teunissen ANR: 727605 E-mail: j.h.w.teunissen@uvt.nl Study program: Pre-master Strategic Management 2009/2010 Supervisor: Drs. A.D. Timmers E-mail: a.d.timmers@uvt.nl Room: K1.106 Number of words: 6075

Preface This bachelor thesis is written for the Department Organization and Strategy. This bachelor thesis is a scientific literature review, in which I aim to answer a problem statement based on academic literature. The main skills and competences I have tried to develop by writing this bachelor thesis are informational literacy (searching, selecting, interpreting and writing) and scientific reasoning. I have chosen for the topic Organizational Behavior and made the topic more specific and attainable through writing about the culture of an organization and organizational change. I would like to thank my supervisor Drs. A.D. Timmers and the members of my group for the suggestions and recommendations during the writing of my bachelor thesis. J.H.W. Teunissen Tilburg University, June 2010 2

Management summary The increasing interest of the last decades into organizational culture refers to the assumption that the performance of an organization may be influences by the culture of the organization. The values and beliefs of an organizational culture can determine the firm s strategy and performance results. The performance of an (successful) organization can be affected through changes in for instance the economic, geographic, political environment and the customer s expectations. Organizational changes to meet the changing market conditions can affect the strategy, performance and effectiveness of an organization. Based on the above stated assumptions, the following problem statement is examined: Does organizational change influences organizational culture? Organizational culture has been studied in this thesis from three different perspectives and can be defined as a set of underlying assumptions and beliefs, which give a direction of how an individual in an organization should act in a specific context. The common similarities between the three perspectives of culture typologies are the degree of innovativeness and bureaucracy in the organizational culture types. The dimensions of the different organizational culture typologies make a distinction between the culture types in an organization and influence the performances and results of an organization. Motives for an organizational change are competitive discrepancy and striving discrepancy. The intention of a competitive change is to improve the resources and capabilities of the organization against its direct competitors. A striving change is a change to develop resources and capabilities, like an organization to which the organization strives to be in the future. The degree of success fullness of the implementation of an organizational change depends on the management s ability, the ability to consider the nature of the change, the internal and external forces in the business environment, the introduction and implementation of the changes and the variety of personality characteristics in the organization. Changing the resources and capabilities of an organization to meet the changing conditions of the environment may influence the culture of an organization. Therefore, creating a readiness for change (competitive and/or striving discrepancy) is required. Employees can offer resistance to changes. Resistance factors of individuals in an organization are the openness to change, selfefficacy beliefs and the degree of access to information and involvement in decision-making. Cultures with a high level of flexibility and risk taking and a low level of control may offer less 3

resistance to change efforts and more readiness for change, which results in a more easily adaption of an organizational change. Those organizational cultures are associated with training, innovation, development, open communication and adaptable/participative decision-making. Employees in an organization with a low level of risk taking and a high level of control culture may offer more resistance to change and less readiness for change. 4

Table of content Preface... 2 Management summary... 3 Table of content... 5 Chapter 1 Introduction... 6 1.1 Problem indication... 6 1.2 Problem statement... 6 1.3 Research questions... 7 1.4 Methodology... 7 1.5 Structure... 7 Chapter 2 Organizational culture... 8 2.1 Definition of organizational culture... 8 2.2 Organizational culture dimensions/ typologies... 8 2.2.1 Deal and Kennedy s perspective... 8 2.2.2 Quinn and colleagues perspective... 9 2.2.3 Berson, Oreg and Dvir s perspective... 11 2.3 Conclusion... 11 Chapter 3 Organizational change... 13 3.1 Motives for change... 13 3.2 Uncertainty during organizational change... 14 3.3 Implementation of an organizational change... 14 3.4 Conclusion... 15 Chapter 4 Organizational change and culture... 16 4.1 Readiness for change... 16 4.2 Culture perspectives and organizational change... 16 4.3 Effects of culture change... 18 4.4 Conclusion... 18 Chapter 5 Conclusion and recommendations... 20 5.1 Conclusion... 20 5.2 Managerial implication... 21 5.3 Further research... 21 References... 22 5

Chapter 1 Introduction 1.1 Problem indication A lot of research has been done during the last decades which refers to the relationship between organizational cultures and organizational performance. Harris and Ogbonna (2000) argued that the popularity of and the interest in organizational cultures are based on the assumption that several organizational cultures can lead to a profitable performance of the organization. Many researchers suggest that the performance of an organization depends on the degree to which the values of the culture are shared in an organization. Dosglu-Guner (2001) argued that different firm s strategies and performance results are based on the assumption of the differences in organizational values and beliefs. The effectiveness of the organizational culture can be defined in, for instance, finding new markets. Organizational culture can affect corporate behavior and the strategy of the organization. The argument that organizational culture is connected to performance is also established on the assumption that culture can generate a competitive advantage. The uniqueness of an organizational culture can be a source to generate an advantage over competitors. Barney (1986) argued that a sustainable advantage depends on the value, rarity and sustainability of the culture. Fairbairn (2005) shows that changes in for instance the competitive, economic, geographic, political environment and customer s expectations can affect the performance of an (successful) organization and its organizational culture. Walker, Armenakis and Bernerth (2007) argue that a reaction to the changing environments conditions can be an organizational change, like a restructuring of an organization, mergers, new technology or acquisitions. Schein (1985) argued that changes in an organizational culture are required if an organizational culture becomes dysfunctional in a dynamic competitive environment. If a new strategy, an organizational change, does not fit in the old culture, it may be difficult for some of the employees to accept and understand the new assumptions, beliefs and values. Based on the above stated assumptions, changes in an organization to meet changing market conditions may influence the culture of the organization. In this thesis it will be tested how organizational change reflects on organizational culture. 1.2 Problem statement The problem statement of this thesis will be the relation between organizational change and organizational culture based on the problem indication, what results in the following problem statement: Does organizational change influences organizational culture? 6

1.3 Research questions To evaluate and discuss the problem statement, the following research questions will be examined: What are the dimensions and types of organizational culture? What are the motives of organizational change and how can an organization implement a organizational change? What are the effects of organizational change on organizational culture? 1.4 Methodology A descriptive study will be done by using literature reviews. Sekeran (2003) stated that a descriptive study is undertaken in order to ascertain and be able to describe the characteristics of the variables of interest in a situation (p. 121). Referring to this thesis, a descriptive study can be used, for instance, to learn about and describe the dimensions of organizational culture. The goal of this bachelor thesis is to offer and describe relevant aspects of the relation between organizational change and organizational culture. 1.5 Structure The thesis starts with an introduction chapter to introduce the research area. In the following chapters, the research area will be discussed through analyzing and evaluating the research questions. Chapter two will give the most relevant findings about culture typologies that can exist in an organization. Chapter three shows the making sense of organizational changes. Chapter four will contribute to chapter two and three through analyzing how organizational change can influence an organizational culture. Chapter five will evaluate and discuss the results of the findings in the previous chapters and possible recommendations for further research will be made. 7

Chapter 2 Organizational culture The increasing interest of the last decades into organizational culture refers to the assumption that the performance of an organization in a certain way depends on the organizational culture. The values and beliefs of an organization culture can determine the firm s strategy and performance results. In this chapter, the definition of organizational culture will be defined and three perspectives of culture dimensions/typologies will be classified. The findings and results will be discussed in the conclusion. 2.1 Definition of organizational culture Organizational culture is defined by one of the most influential contributor, Schein (1990), as a set of beliefs, values, and assumptions that are shared by members of an organization. Decisions and behaviors of the members are influenced by these values. According to Deal and Kennedy (1983), culture is based on rituals, group norms, habits of thinking and values. Denison & Mishra (1995) reflect culture on culture traits, attributes and dimensions of assumptions, beliefs and values. O Reilly, Chatman & Caldwell (1991) defined organizational culture as a set of core values shared by the members of an organization. Hofstede (1998) defined organizational culture as a collective program of mind setting which distinguishes the members of one organization from another. A common similarity of the above illustrators of the definition of organizational culture is the set of underlying assumptions and beliefs, which give a direction of how an individual in an organization should act in a specific context. The actions of the members in the organization are often based on the organization s shared norms, beliefs and values. 2.2 Organizational culture dimensions/ typologies 2.2.1 Deal and Kennedy s perspective The above illustrated definition of Deal and Kennedy (1983) is an often used definition in several organizational culture literature studies. In this paragraph, the definition will be translated into culture types based on two dimensions. Deal and Kennedy (1983) argued that a culture selects what is needed to make an organization successful. They characterized the business environment, to find a distinction between cultural patterns, along two dimensions: risk and feedback. The dimension feedback characterized the rate of response. The risk dimension characterized the degree of uncertainty. Deal and Kennedy (1983) suggest that four culture types can be distinguished, through using the two dimensions risk and feedback. 8

Work-hard / play-hard culture A work-hard culture emphasizes quick feedback and a low level of risk. Characteristics of this culture are a low level of risk taking and intensive feedback. A customer-oriented culture. Though-guy macho culture A though-guy macho culture emphasizes quick feedback and high risk. Characteristics of this culture are taking high risks, making quick decisions and receiving quick feedback. The culture tries to avoid standard procedures, guidelines and rules. Process culture The process culture emphasizes slow feedback and low risk. Organizations with a process culture can be associated with bureaucracies. Members in an organization with this culture are concerned of how things are done (processes are in detail) not with what is achieved. Bet-your-company culture This culture emphasizes slow feedback and high risk. Organizations with a bet-your company culture are flat and informal. Deal and Kennedy (1983) make a distinction between culture types based on two dimensions, feedback and risk. The speed of feedback and the level of risk taking determine the rituals, group norms, habits of thinking and values of the organization. 2.2.2 Quinn and colleagues perspective Gregory, Hariss, Armenakis and Shook (2009) used the Competing Values Framework (CVF) adopted by Quinn and colleagues to understand the relationship between organizational culture and organizational effectiveness. The Competing Value Framework is used in this chapter, because this framework is often used in the past as well as in recent studies to examine the values and criteria of effectiveness by which an organization is judged. Besides, the CVF is established on empirical studies and the framework has proven its effectiveness in several organizations and in different organizational contexts. Cooper and Quinn (1993) described organizational culture along two dimensions: structure and focus. The dimension structure varies from flexibility to control. Flexibility emphasizes a high level of risk taking and employees can create more their own behavior in an organization. The level of control in an organization characterized how strict the guidelines, rules and procedures are, the consistency of the patterns of behavior. The focus dimension varies from an external focus to an internal focus. An external focus emphasizes the organization s ability to function well in its environment. The internal focus emphasizes internal factors in an organization, like employee satisfaction. 9

Denison and Spreitzer (1991) suggest that four types of organizational culture can be distinguished, using the two dimensions structure and focus. Group culture A group culture emphasizes a high level of flexibility and an internal focus. Core values of a group culture are belonging, trust and participation. Motivational factors are attachment, cohesiveness and membership. Leaders in a group culture are participative, considerate and supportive. Developmental culture A developmental culture emphasizes a high level of flexibility, high level of risk taking and an external focus. Characteristics of this culture are change and adaption, to stimulate growth. Leaders in a developmental culture support entrepreneurial behavior and inspire members of an organization to be creative. Motivational factors are growth, stimulation, creativity and variety. Rational culture A rational culture emphasizes a high level of control and an external focus. A core value of this culture is goal attainment, which is a form of controlling. Characteristics of this culture are productivity, efficiency and achievement. Leaders in a rational culture are goal oriented, directive, functional and encouraging productivity. Hierarchical culture A hierarchical culture emphasizes a high level of control and an internal focus. Characteristics of this culture are strict guidelines, procedures, internal efficiency, control and coordination. Motivational factors are order, rules and regulations. Denison and Spreitzer (1991) argued that the group culture can be contrasted with the rational culture. The developmental culture can be contrasted with the hierarchical culture. Some cultures share characteristics of a dimension, like the group and developmental culture share the high level of flexibility. Empirical evidence suggests that the organizational cultures of the Competing Values Framework influence the organization s effectiveness. A culture with high flexibility and internal focus culture seems to be the most consistent predictor of effectiveness comparing to the other linkages of dimensions. Quinn et al. (1993) make a distinction between culture types based on the dimensions, structure and focus. The effectiveness of the organization depends on the level of flexibility and control and the internal or external focus. 10

2.2.3 Berson, Oreg and Dvir s perspective Berson, Oreg and Dvir (2008) identified three dimensions of organizational culture as stated in several well-researched organizational culture typologies. These three recurring dimensions are used in this chapter, because the dimensions are used consistently in known culture typologies. Besides, Berson, Oreg and Dvir (2008) suggest on empirical evidence that each organizational culture is influences by the dimension innovation, bureaucracy and supportive orientation. These three dimensions distinguish organizational forms and shows differences in organizational behavior. The dimension, innovation, is included in most typologies and emphasizes an entrepreneurial orientation, creativity and a risk-taking work environment. Characteristics of this dimension are high flexibility and a low level of control. The second dimension, bureaucratic, emphasizes formalization and centralization. This culture is based on rules, regulations and efficiency, which results in lack of flexibility (consistency) and a high level of control, predictability. The last dimension is a dimension with a supportive orientation towards organization members. Characteristics of this culture are trust, safety and an encouraging and collaborative atmosphere. Innovation, bureaucracy and supportive orientation are the dimensions, according to Berson, Oreg and Dvir (2008), which can make a distinction between organizational forms and the functioning of an organization. 2.3 Conclusion As above illustrated three perspectives of organizational cultures dimensions are evaluated. Deal and Kennedy (1983) suggest that four culture types can be distinguished, using the dimensions risk and feedback. Denison and Spreitzer (1991) use the dimensions structure and focus to classify four culture types. Berson, Oreg and Dvir (2008) identified three recurring dimensions innovation, bureaucracy and supportive orientation of different culture typologies. The dimensions make a distinction between the culture types in an organization and influences the performances and results of an organization. The common similarities between the three perspectives of culture typologies are the degree of innovativeness and bureaucracy in the organizational culture types. The three perspectives of organizational cultures are illustrated in table one of the next page. 11

Table 1, Culture perspectives. Perspectives Dimensions Culture types Deal and Kennedy s perspective Risk and feedback Work-hard / play-hard culture Though-guy macho culture Process culture Denison and Spreitzer s perspective Berson, Oreg and Dvir s perspective Structure and focus Innovation, bureaucracy and supportive orientation Bet-your-company culture Group culture Developmental culture Rational culture Hierarchical culture Several well-researched organizational culture typologies 12

Chapter 3 Organizational change Organizational changes can affect the performance and effectiveness of an organization. Organizations are under pressure to change, to gain competitive advantage. To survive on the long term in the competitive environment, organizational change efforts are required. In this chapter the motives for change and the introduction and implementation of an organizational change will be discussed. The findings and results will be evaluated in the conclusion 3.1 Motives for change Labiance, Fairbank, Andrevski and Parzen (2009) argue that an organization will make a change if there are discrepancies between an organization s ambitions and the received performances. The performance of an organization can be established by comparing the current performance with the historical performance of the organization or with the performance of a comparable organization. The motivation of an organization to change depends on how far the level of performance above or below is with respect to the ambitions of the organization. The motivation to learn and change depends on the received level of performance. According to Gioia, Schultz and Corley (2000) future ambitions of organizations based on two types of comparisons: competitive and striving. Competitive comparison A comparison between the current performance of the organization and the current performance of the direct competitors (competitive discrepancy). Striving comparison A comparison between the current performance of the organization and the performance of an organization to which the organization strives to be in the future (striving discrepancy). An organization is likely to take more extensive, radical and riskier changes if the performance against its current direct competitors is weak. Organizations with a relative good performance against its competitors and who are striving to achieve a higher level of performance are likely to take more radical and riskier changes, compared to organizations with a relative good performance that are not striving to achieve a higher level of performance. Labiance, Fairbank, Andrevski & Parzen (2009) argued that the driver for changes of organizations with a high level of competitive discrepancy will be the competitive discrepancy instead of the striving discrepancy. 13

Organizational changes can be radical, risky and difficult, but necessary if an organization likes to adapt to and survive in their environment. The understanding of the motivation of change of the organization s future is therefore considerable. 3.2 Uncertainty during organizational change Bordia, Hobman, Jones, Gallois and Callan (2004) argued that organizational changes to stay competitive can lead to uncertainty among the members of an organization. Bordia et al. (2004) distinguish three types of uncertainty: strategic, structural and job-related uncertainties. Strategic uncertainty Strategic uncertainty refers to the external business environment, reasons for change, direction/ vision of the organization and its sustainability. Structural uncertainty Structural uncertainty refers to uncertainty regarding to the structure, shape and form, of an organization during changes. For instance, restructuring of work-units. Job-related uncertainty Job-related uncertainties refer to uncertainty regarding to, for instance, promotion opportunities, job security, job role and status. Consequences of uncertainty in an organization are, for instance, stress, turnover intentions, a lower level of job satisfaction, job commitment and trust. The consequences of uncertainty cause a lack of control feeling, which can lead to a lower performance of an employee. Communication of the management during an organization change can reduce the uncertainties of the employees in an organization. An employee is more aware of and prepared for organizational changes through the communication of change-related information. The sense of control during organizational changes can be stimulated through allowing the employee to participate in decision making, which can lead to an increasing level of awareness and understanding of the change. 3.3 Implementation of an organizational change Walker, Armenakis and Bernerth (2007) argued that an organization needs to take four factors into account to implement an organizational change successful. The efforts of change are influenced by the four factors/issues: content, contextual, process and individual differences. Content issues A content issue refers to the nature of the change and is specific to each organization. An organizational change can be a fundamental or incremental change. Fundamental changes occur 14

if an organization likes to meet the environmental demands, for instance, growing competition. An incremental change is less radical, but a continues improvement of, for instance, a process. Contextual issues A contextual issue refers to the forces in the internal and external environment of the organization. External forces like competitive pressure and technological changes. Responding to the demands of the external environment is the key issue of a contextual issue. Internal forces emphasize the level of, for instance, professionalism and managerial attitudes toward changes. Process issues A process issue refers to the introduction and implementation of the changes. The process issue emphasizes, for instance, the readiness for change and influences the beliefs, attitudes and the behaviors of the employees. Individual differences Individual differences emphasize the variety of personality characteristics. An employee with a high level of openness to experience and self-monitoring may react more positively to an organizational change. The degree of success fullness of the implementation of an organizational change depends on the management s ability, the ability to consider the above mentioned change factors/ issues. Ndofor, Priem, Rathburn and Dhri (2009) argued that an organizational change does not guarantee a performance improvement. The ability of the manager to recognize an appropriate organizational change and the implementation of the organizational change will determine both the performance improvement. 3.4 Conclusion Motives for an organizational change are competitive discrepancy and striving discrepancy. Organizations with a high level of competitive discrepancy are in general less motivated to decline the level of striving discrepancy. Organizations are likely to take more extensive, radical and riskier changes to improve their performance against its current direct competitors. To implement a change successful, it is recommended to consider as manager the nature of the change, the internal and external forces in the environment, the introduction and implementation of the changes and the variety of personality characteristics in an organization, the four factors/ issues of implementation. A successful change may occur through finding a fit between the content issues, contextual issues, process issues and individual differences. The uncertainty of an employee and the lack of control feeling during an organizational change can be reduced, to create a readiness for change by communicating, for instance, change-related information and allowing employees to participate in decision-making. 15

Chapter 4 Organizational change and culture Unpredictable changes occur in business environments of organizations. Causes of the changing environments are, for instance, market growth and technology development. Changes in the environment can influences the competencies of an organization. Competencies, strategies, beliefs, values and the organizational culture can become less valuable or no longer effective in the business environment of the organization (Akgun, Byrne, Lynn and Keskin, 2007). Changing an organizational form to meet the changing conditions of the environment may influence several organizational elements, like the culture of an organization. Organizational culture is a factor, by changing processes that should be taken into account to gain competitive advantage. In this chapter the connection will be made between, the previous chapters, organizational change and organizational culture. The findings and results of the effects of organizational change on organizational culture will be evaluated in the conclusion. 4.1 Readiness for change Rangarajan, Chonko, Jones and Roberts (2004) show that it is required to understand the perceptions of an organization s readiness for change (competitive and/or striving discrepancy), to understand the change processes as member of an organization. The assumptions and expectations of an employee about a change process are based on what is happening in their environment and establish an employee s perception of an organization s readiness for change. Change brings a certain degree of uncertainty. Uncertainty for instance about the roles and responsibilities of the members of an organization. Employees will draw conclusions about their positions regarding to the organizational changes. This process will form an impression about the organization s readiness for change and can be an indication of the organization s ability of implementing the change efforts successfully (Armenakis, Harris and Mossholder, 1993). The above assumptions confirm, referring to chapter three, the importance of the process issue factor of implementing an organizational change. 4.2 Culture perspectives and organizational change Organizations with changing environments need to implement changes in strategy, process, structure and culture. Nowadays organizations with bureaucratic cultures attempt to move to a more innovative culture to meet the changing conditions of the environment. McNabb and Sepic (1995) argued that it is difficult to change an established culture. Referring to chapter two of organizational culture, culture is a set of underlying assumptions and believes to live and work by. These principles and standards influence the behaviors of the employees. 16

Koberg and Chusmir (1987) argued that an organization with a bureaucratic culture likes to attract and retain employees who do not like to take risk and be creative. This culture discourages creativity and innovativeness and encourages control and power, which results in strict guidelines, procedures and rules. Referring to chapter two, the characteristics of the process culture of Deal and Kennedy (1983) and the hierarchical culture of Denison and Spreitzer (1991) can be compared with a bureaucratic organizational culture. The bureaucracy dimension of Berson, Oreg and Dvir (2008) can make the distinction between a bureaucraticoriented organizational form with respect to the other organizational forms. An organization with a bureaucratic-oriented culture supports organizational efficiency through specialization and formalization. In dynamic business environments is organizational efficiency still the highest priority of the bureaucratic organizational culture (Berson, Oreg and Dvir, 2008). Innovative cultures have a creative work environment with a high level of risk taking and challenges. Organizations are result-oriented and stimulating employees to be entrepreneurial (Koberg and Chusmir, 1987). Referring to chapter two, the characteristics of the developmental culture of Denison and Spreitzer (1991) and the though-guy macho culture of Deal and Kennedy (1983) can be compared with the innovative organizational cultures. The innovative dimension of Berson, Oreg and Dvir (2008) can make the distinction between an innovative-oriented organizational form with respect to the other organizational forms. Organizations with an innovative-oriented organization culture support changes and are seeking for new opportunities in the business environment of the organization. Resources and capabilities are managed strategically (Berson, Oreg and Dvir, 2008). Certain organizational cultures are suitable for changes. Entrepreneurship and market orientation are the elements of culture, which support changes. Market orientation refers to meeting the customers needs. The highest priority is to offer and create superior customer value. Norms for behavior are based on organizational development and responsiveness to market information. Characteristics of entrepreneurship are, for instance, risk tolerance and innovation. Entrepreneurial behavior seeks for opportunities and creates products and services ahead of competitors and the needs of customers (McNabb and Sepic, 1995). Employees can offer resistance to changes. Jones, Jimmieson and Griffiths (2005) show several employee resistance factors to organizational change. Characteristics associated with the individual in an organization, of resistance factors are, for instance, the openness to change, selfefficacy beliefs and the degree of access to information and involvement in decision-making. Referring to chapter three, the management of an organization can reduce the uncertainty and resistance to changes of an employee during the organizational change through allowing the 17

employee to participate in decision-making and to offer relevant change-related information. Referring to the CVF framework of Quinn et al. (1993), cultures with a high flexibility and external focus are more conducive to a successful implementation of an organizational change, higher level of readiness for change. Organizations with a high level of flexibility and an external focus are associated with training, innovation, development, open communication and adaptable/participative decision-making. Employees in a bureaucratic organizational culture, high level of control, may offer a higher level of resistance to change efforts. This culture is associated with standard procedures, guidelines, closed communication and limited participation in decision making, which results in a lower level of readiness for change. 4.3 Effects of culture change Referring to the problem indication and the introduction of this chapter, Schein (1985) argued that a culture change is required if an organizational culture becomes dysfunctional in a dynamic competitive environment. It is a process of developing / defining new beliefs, values and assumptions through teaching, coaching and changing the structure and processes. Changing individual and group behavior is difficult and time consuming. If an organization has been successful for a long period with their beliefs, values and assumptions, it is hard to understand alternative strategies. If a new strategy, organizational change, does not fit in the old culture, it will be difficult for some of the employees to accept and understand the new strategy. To prevent that valued employees do not leave the organization, a manager has to challenge consistently the old assumptions, to make it difficult for the employees to sustain the old assumptions, values and beliefs. Changes in an organization culture can have negative as well as positive effects. For instance, a change can bring a new type of employee in an organization through new criteria of selection and dismissals or an employee leaves the firm on their own, which may resulted in additional losses for the organization. 4.4 Conclusion It is recommended to create a readiness for change, to reduce uncertainty and resistance to change, before implementing an organizational change. A cause of an organizational change is a discrepancy between the ambitions of the organization and the received performances. The extent to which an organizational change will be made depends on how far the level of the current performance varies from the ambitions of the organization. An organizational change can be a competitive and/or a striving change. The intention of a competitive change is to improve the resources and capabilities of the organization against its direct competitors. A striving change is a change to develop resources and capabilities, like an organization to which the organization strives to be in the future. To implement a change successfully it is recommended to consider the four factors/issues, as described in chapter three, especially to 18

consider the process issues and the individual differences in an organization. Referring to chapter two, a member of an organization often based their action on the organization s shared norms, beliefs and values. Cultures with dimensions like innovation, customer focus and high flexibility are more open for changes, can more easily adapt the changes, and are not being forced to change their culture. Changes, for instance, in a bureaucratic culture to meet the market conditions is difficult, time consuming, and can have positive as well as negative effects on the members of an organization. To discuss and evaluate the problem statement, does organizational change influences organizational culture, it can be stated on the above assumptions that an organizational change can have a certain influences on an organizational culture. Especially on a culture, which can not easily adapt changes. Cultures with a high level of control and a low level of flexibility. 19

Chapter 5 Conclusion and recommendations 5.1 Conclusion In order to discuss and evaluate the problem statement, does organizational change influences organizational culture, three research questions are tried to be answered. In chapter two different culture types are classified based on the assumptions of three perspectives. Deal and Kennedy (1983) suggest that four culture types can be distinguished, through using the two dimensions, risk and feedback. The dimension feedback characterized the rate of response. The risk dimension characterized the degree of uncertainty. Denison and Spreitzer (1991) suggest that four types of organizational culture can be distinguished, using the two dimensions, structure and focus. The dimension structure varies from flexibility at one side to control at the other side. The focus dimension varies from an external focus to an internal focus. Berson, Oreg and Dvir (2008) argued that the dimensions innovation, bureaucracy and supportive orientation can make a distinction between organizational culture forms and the functioning of an organization. The common similarities between the three perspectives of culture typologies are the degree of innovativeness and bureaucracy in the culture types. Chapter three identified the motives of organizational change and suggests how an organization attempt to implement an organizational change successfully. A motive to make an organizational change is the discrepancy between the organization s ambitions and the received performance. How radical, risky and extensive the organizational change will be depends on the current performance with respect to the ambitions of the organization is. The degree of success fullness of the implementation of an organizational change depends on the management s ability, the ability to consider the nature of the change, the internal and external forces in the environment of the organization, the introduction and implementation of the changes and the variety of personality characteristics. Unpredictable changes in the environment can influence the competencies of an organization. Competencies, strategies, beliefs, values and the organizational culture can become less valuable or no longer effective in the business environment. Changing the resources and capabilities of an organization to meet the changing conditions of the environment may influence the culture of an organization. Therefore, creating a readiness for change (competitive and/or striving discrepancy) is required. Employees can offer resistance to changes. Resistance factors of individuals in an organization are the openness to change, self-efficacy beliefs and the degree of access to information and involvement in decision making. Cultures with a high level of flexibility and risk taking and a low level of control may offer less resistance to change efforts and more readiness for change, which results in a more easily adaption of an organizational change. Those organizational cultures are associated with training, innovation, development, 20

open communication and adaptable/participative decision-making. Like the characteristics of the developmental culture of Denison and Spreitzer and the though-guy macho culture of Deal and Kennedy. Employees in an organization with a low level of risk taking and a high level of control culture may offer more resistance to change and less readiness for change. Like the process culture of Deal and Kennedy and the hierarchical culture of Denison and Spreitzer. Changing individual and group behavior in a more bureaucratic culture is more difficult and time consuming. If an organization has been successful for a long period with their beliefs, values and assumptions, it is hard to understand alternative strategies. Offering change-related information and allowing employees to participate more in decision making during an organizational change can reduce the resistance to change and can create more readiness for change. In general, changes in an organization can have negative as well as positive effects. A change can bring, for instance, a new type of employee in an organization through new criteria of selection and dismissals or an employee leaves the firm on their own, which may resulted in additional losses for the organization. 5.2 Managerial implication This study emphasized the importance of managing an organizational change. The degree of success fullness of the implementation of an organizational change depends on the management s ability, especially the ability to influences the beliefs, attitudes and the behaviors of the employees and to create readiness for change. 5.3 Further research Stated on the above assumptions, organizational cultures with a high level of flexibility and risk taking and a low level of control with respect to organizational culture with a high level of control and a lack of flexibility are more capable to adapt organizational changes. However, what about organizational cultures where trust, safety and an encouraging and collaborative atmosphere characteristics of the organizational culture are? To discuss and evaluate this question, it is recommended for instance to examine the resistance factors towards change efforts and the readiness for change of individuals in an employee-oriented organizational culture. Besides, it can be interesting for further research to examine what kind of influences the economic crisis has on certain types of organizational cultures. Another interesting topic to examine is, for instance, the relationship between organizational change and employee commitment or job satisfaction. 21

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