ORGANIZATIONAL CULTURE AND CHANGE

1) Culture is a set of major understandings and assumptions shared by a group, for example, within an ethnic group or a country. Organizational culture consists of the major understandings and assumptions for a business, a corporation, or an organization. The understandings, which can include common beliefs, values, and approaches to decision making, are often not stated or documented as goals or formal policies. Employees, for example, might be expected to be clean-cut, wear conservative outfits, and be courteous in dealing with all customers. Sometimes organizational culture is formed over years. In other cases, it can be formed rapidly by top-level managers—for example, implementation of a “casual Friday” dress policy.

2) Like organizational structure, organizational culture can significantly affect the development and operation of information systems within an organization. A procedure associated with a newly designed information system, for example, might conflict with an informal procedural rule that is part of organizational culture. Organizational culture might also influence a decision maker’s perception of the factors and priorities that must be considered in setting objectives. For example, there might be an unwritten understanding that all inventory reports must be prepared before ten o’clock Friday morning. Because of this understood time deadline, the decision maker may reject a cost-reduction option that requires compiling the inventory report over the weekend.

3) Organizational change deals with how for-profit and nonprofit organizations plan for implement, and handle change. Change can be caused by internal or external factors. Internal factors include activities initiated by employees at all levels. External factors include activities initiated by competitors, stockholders, federal and state laws, community regulations, natural occurences (such as hurricanes), and general economic conditions. Many European countries, ror example, adopted the euro, a single European currency, which changed how financiai companies do business and how they use their information systems. 

4) Cange can be sustaining or disruptive.9 Sustaining change can help an organization improve raw materials supply, the production process, and the products and services offered by the organization. New manufacturing equipment to make disk drives is an example of a sustaining change. The new equipment might reduce the costs of producing the disk drives and improve overall performance. Disruptive change, on the other hand, often harms an organization’s performance or even puts it out of business. The 3.5-inch hard-disk drive was a disruptive technology for companies that produced the 5.25-inch hard-disk drive. When it was first introduced, the 3-5-inch drive was slower and had lower capacity and lower demand than the existing 5.25-inch disk drives. Over time, however, the 3.5-inch drive improved and replaced the 5.25-inch drive in performance and demand. Some companies that produced the 5.25-inch drives that didn’t change didn’t survive. Today, many of the 5.25-inch drive companies are out of business. In general, disruptive technologies may not originally have good performance, low cost, or even strong demand. Over time, however, they often replace existing technologies. They can cause good, stable companies to fail when they don’t change or adopt the new technology.

5) Overcoming resistance to change, especially disruptive change, can be the hardest part of bringing information systems into a business. Occasionally, employees even attempt to sabotage a new information system because they do not want to learn the new procedures and commands. In most of these instances, the employees were not involved in the decision to implement the change, nor were they fully informed about the reasons the change was occurring and the benefits that would accrue to the organization.

6) The dynamics of change can be viewed in terms of a change model. A change model is a representation of change theories that identifies the phases of change and the best way to implement them. Kurt Lewin and Edgar Schein propose a three-stage approach for change (see Figure 2.7). Unfreezing is the process of ceasing old habits and creating a climate receptive to change. Moving is the process of learning new work methods, behaviors, and systems. Re freezing involves reinforcing changes to make the new process second nature, accepted, and part of the job.10 When a company introduces a new information system, a few members of the organization must become agents of change—champions of the new system and its benefits. Understanding the dynamics of change can help them confront and overcome resistance so that the new system can be used to maximum efficiency and effectiveness.

7) Organizational learning is closely related to organizational change. According to the concept of organizational learning, organizations adapt to new conditions or alter their practices over time. So, assembly-line workers, secretaries, clerks, managers, and executives learn better ways of doing business and incorporate them into their day-to-day activities. Collectively, these adjustments based on experience and ideas are called organizational learning. In some cases, the adjustments can be a radical redesign of business processes, often called reengineering. In other cases, these adjustments can be more incremental, a concept called continuous improvement.