ORGANIZATIONAL CHANGE,
DESIGN, AND CULTURE
Drew Carton, Ph.D.
Management 101: Week 3, Fall 2014
A. Yes
50%
50%
No
Ye
s
B. No
A. Yes
50%
50%
No
Ye
s
B. No
A. Yes
50%
50%
No
Ye
s
B. No
ExperienceChange
Threat of
new entrants
Bargaining power of
suppliers
Bargaining power of
buyers
Threat of
Substitute products and
services
Adapted from Exhibit 2.2 Porters Five Forces Model of Industry Competition
Rivalry
Rivalry diminishes profits as resources are devoted toward price
competition, increased customer service, warranties, etc.
20%
15%
Tobacco
Food Processing
Household Products
Electrical Equipment
Financial Services
Specialty Chemicals
Newspaper Integrated Petroleum Electric Utility - East
Bank
Retail Store
Telecom
10%
5%
0%
(5%)
(10%)
(15%)
100
200
300
11
Avg. Spread
(1984-2002)
Toiletry & Cosmetic
40%
Tobacco
30%
Soft Drinks
Pharmaceutical
Med Supplies
20%
Computer Software
Publishing
Financial Services
Petro-Integergrated
Bank
10%
Aerospace/
Defense
Retail Store
Railroad
For El/Ent.
For Telecom
0%
Tele Service
Semiconduct
Air Transport
Textile
Steel
(10%)
Power
Paper & For. Entertain
(20%)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
13
KNOWLEDGE FOR ACTION
Threat of
new entrants
Bargaining power of
suppliers
Bargaining power of
buyers
Threat of
Substitute products and
services
Adapted from Exhibit 2.2 Porters Five Forces Model of Industry Competition
ORGANIZATIONAL
CHANGE
KNOWLEDGE FOR ACTION
Social
Change
Resisters
Champions
Bystanders
Time
20
KNOWLEDGE FOR ACTION
21
KNOWLEDGE FOR ACTION
22
KNOWLEDGE FOR ACTION
24
KNOWLEDGE FOR ACTION
TAKE IT FORM
DWIGHT: THIS
IS HOW YOU
FORM AN
ALLIANCE!!!
KNOWLEDGE FOR ACTION
Ouster at Citigroup
26
2.
3.
4.
5.
6.
7.
8.
2.
3.
4.
5.
6.
7.
8.
FORMULATE
IMPLEMENT
ORGANIZATIONAL
DESIGN AND CULTURE
Organizational Design
Centralization
Structure
Divisional structure
Each unit is run as if it is its own company. Each unit serves one
product or market segment
Functional structure
Each unit is responsible for a particular specialization (e.g.,
engineering, marketing, finance)
GlobalTech
What is culture?
What is culture?
Culture
Visibility and
Awareness
High
Artifacts
and
Practices
Values
Low
Visibility and
Awareness
High
Verbal (stories,
jargon, jokes)
Physical (dress,
objects, layout)
Artifacts
and
Practices
Norms and
rules of conduct
Values
Low
Question:
Question:
CLAN CULTURES
People behave appropriately when they have trust in and loyalty
to an organization (Ouchi, 1977; Hartnell et al., 2011)
Source: OReilly
& Chatman,
1996
Hartnell et al.,
2011
A. Yes
50%
50%
No
Ye
s
B. No
Difficult to change
A. Yes
50%
50%
No
Ye
s
B. No
(think of Microsoft).
Organizations can control behavior either through authority/hierarchy
(bureaucratic control) or through culture and internalization of the
organizations values/identity
Strong clan cultures drive cooperation (social glue), increase
commitment, and save expenses, however they can trigger groupthink and
be difficult to change.
KNOWLEDGE FOR ACTION