Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
CHAPTER 9
Organizational Cultures, Innovation, and Change
Adaptability and Values Set the Tone
Chapter 9 Overview
Each Chapter contains several inset features designed to assist the student reader in applying the
concepts to relevant examples. Management Live illustrates how experiences and activities relate
to work performance. Choices provides students with an opportunity to evaluate various sides of
an issue in order to make an informed decision. Hot Topic explores samples of debated topics in
business and strategy. Facts to Consider introduces research or trends that may be used for class
discussion in the classroom or online for distance learning. Insight profiles the importance of
tolerating ambiguity. Quick Case presents a business related scenario for class analysis and
discussion.
The chapter beings by essentially defining an organization’s culture as its unique “personality.”
Examples are given to illustrate how an organization’s culture shapes behavior and influences
the performance of its members. The various components of an organization’s culture are
explained as visible or observable, and they include heroes, rites, rituals, stories, and symbols.
The chapter provides an explanation of an organization’s core culture, which consists of its core
values. The importance of a value-based management team to support a strong organizational
culture is discussed.
Next, the topic of innovation and how organizations approach and support innovation is
discussed. The various forms of innovation (process, product and business model) within an
organization are reviewed. Also included are the important topics of sustainability and green
Chapter 9 Takeaway Questions:
Takeaway 9.1: Understand the nature of organizational culture.
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
Takeaway 9.2: Recognize how organizations support and achieve innovation.
Takeaway 9.3: Describe how managers lead the process of organizational change.
Chapter 9 Lecture Outline:
• Takeaway 9.1: What is the Nature of Organizational Culture?
o Organizational culture is the personality of the organization.
• Takeaway 9.2: How Do Organizations Support and Achieve Innovation?
o Organizations pursue process, product, and business model innovations.
o Green innovations advance the goals of sustainability
• Takeaway 9.3: How Do Managers Lead the Processes of Organizational Change?
o Organizations and teams need change leaders
o Organizational change can be transformational or incremental
Chapter 9 Supporting Materials:
Figures
• Figure 9.1 What are the Main Components of Organizational Culture?
• Figure 9.2 How Do Organizations Commercialize Innovation?
What’s Inside
• Management Live: “Go Along to Get Along” Culture is a Danger Signal
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
Applications
• TestPrep 9 Multiple-Choice Questions
• Skill Building Portfolio
Chapter Outline:
Takeaway 9.1: What is the Nature of Organizational Culture?
• Organizational culture is the personality of the organization
• Organizational culture shapes behavior and influences performance
✓ Strong cultures – cultures which are clear, well-defined, and widely shared among
• Not all organization cultures are alike
✓ Understanding an organization’s culture can be a real asset to employees and job
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
DISCUSSION TOPIC
A discussion of the shared beliefs and values that describe your college or university can be an
effective method for getting students to think about organizational culture. Make sure the
• SEE FIGURE 9.1 What Are the Main Components of Organizational Culture?
✓ With a bit of effort, one can easily identify the organizational culture. The most
• The observable culture is what you see and hear as an employee or customer
• Includes how people dress at work, arrange their offices, speak to and behave toward
one another, and talk about and treat their customers. It is found in stories, heroes,
rituals, and symbols.
DISCUSSION TOPIC
Ask students to individually indentify the elements of observable culture (stories, heroes,
• Core culture is found in the underlying values of the organization
✓ Core Values are beliefs and values shared by members of the organization
• Value-based management supports a strong organizational culture
DISCUSSION TOPIC
The public ethical collapse of Enron in late 2001 was soon followed by numerous reports of
other organizations’ ethical failures, large and small. In many instances, these ethical failures
were eventually attributed to (a) organizational cultures that did not genuinely value ethical
behavior and/or (b) leaders at the top of the organizational hierarchy who did not serve as an
effective role model of ethical behavior. This is certainly the case with Enron. Discuss with the
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
9.1 Questions for discussion suggested answers
1) Can an organization achieve success with a good organizational design but a weak
organizational culture?
2) When you are in your local bank or any other retail establishment as a customer, what
do you see and hear around you that identifies its observable culture?
3) What core values would you choose if you were creating a new organization and wanted
to establish a strong performance-oriented culture?
9.1 Career Situation: What Would You Do?
You have two really nice job offers and will soon have to choose between them. They are both in
the same industry, but you wonder which employer would be the “best fit” for you. Make a list
of the key aspects of the cultures of these organizations that you would investigate to help make
your job choice. Why are these aspects of organizational culture most relevant to you as a
person?
Student answers will vary.
Takeaway 9.2: How Do Organizations Support and Achieve Innovation?
• Organizations pursue process, product and business model innovations
✓ Innovation is the process of taking a new idea and putting it into practice
✓ Process innovations result in an improved process such as faster processing of
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
• Green innovations pursue and support the goals of sustainability
✓ Green or sustainable innovation is the process of turning ideas into innovations
• Social innovations seek solutions to important societal problems
✓ Social innovation is business innovation driven by a social conscience
• Commercializing innovation turns ideas into products, services or processes that the
organization can use to produce profits.
• Reverse innovation or trickle-up innovation takes products created for small or
emerging markets and moves them into larger distribution.
• FIGURE 9.2 How Do Organizations Commercialize Innovation?
✓ In business it is the process of commercializing innovation that turns new ideas into
• Disruptive innovation uses new technologies to displace existing practices
✓ At time the innovation process is so successful that disruptive innovation occurs.
✓ Harvard Scholar Clay Christensen defines it as “the creation of an innovative
• Innovative organizations share many common characteristics
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
✓ Innovative organizations incorporate innovation into the core values and culture
of the organization. Common characteristics include:
▪ Strategy supports innovation
9.2 Questions for discussion suggested answers
1) Are there any potential downsides to making organizational commitments to green
innovation?
2) What are the biggest trouble points in a large organization that might prevent a great idea
from becoming a commercialized innovation?
3) What difference does a leader make in terms of how innovative an organization
becomes?
9.2 Career Situation: What Would You Do?
Take a look around your present organization, be it school or workplace. What three ideas can
you come up with right away for possible innovations? How would your ideas, if implemented,
benefit both the organization and society at large? What are the potential obstacles to getting
your ideas implemented? What steps could you take as an “innovation champion” to turn your
ideas into real practices?
Student answers will vary.
Takeaway 9.3: How Do Managers Lead the Processes of Organizational
Change?
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
• Organizations and teams need change leaders
• Organizational change can be transformational and incremental
✓ How to Lead Transformational Change:
➢ Establish a sense of urgency for change.
• Three phases of planned change are unfreezing, changing, and refreezing
✓ Kurt Lewin described planned change as a process with three phases
• Unfreezing – preparing a system for change
• FIGURE 9.3 What Are the Change Leader’s Responsibilities in Lewin’s Three
Phases of Planned Change?
Kurt Lewin identified three phases of the planned change process. The first is unfreezing,
the phase where people open up and become receptive to the possibility of change. The
second is changing, where the actual change happens and the new ways of doing things
are put into place. Third is refreezing, the phase where changes are stabilized to become
part of ongoing routines. Lewin believed that change agents often neglect unfreezing and
move too quickly into the changing phase, thus setting the stage for change failures. They
may also neglect refreezing, with the result that any achieved change has only temporary
effects.
✓ The change process is dynamic and improvising is often essential
➢ Change is dynamic and uncertain, and not a linear, step-by-step process with clear
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
DISCUSSION TOPIC
Have the students identify something they believe should be changed about the way your college
or university operates. Then have them analyze how this change could be managed using the
three-phase model of planned change for guidance.
• Times of complexity require improvising in the change process
✓ Improvisational change makes continual adjustments as changes are being
implemented
• Managers use force-coercion, rational persuasion, and shared power change
strategies
✓ Force-Coercion uses the primary power bases of legitimacy, rewards, and
punishments as the primary inducements to change; most useful as a unfreezing
strategy
✓ Rational persuasion – bring about change through persuasion backed by special
knowledge, information, facts, and rational argument
✓ Shared power – encourages people in a collaborative process of identifying values,
assumptions, and goals from which support for change will naturally emerge
✓ FIGURE 9.4 What Happens When a Change Leader Uses Different Types of
Change Strategies?
✓ Force-coercion strategies use authority, offers of rewards, and threats of punishment
✓ Change leaders identify and deal positively with resistance to change
✓ See Table 9.1 for a summary of why people may resist change
➢ Fear of the unknown
➢ Disrupted habits
➢ Loss of confidence
✓ Positive resistance tactics:
▪ Education and communication
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
✓ Negative resistance tactics:
9.3 Questions for discussion suggested answers
1) When is it better to pursue incremental rather than transformational change?
2) Can the refreezing phase of planned change ever be completed in today’s dynamic
environment?
3) Should managers avoid the force-coercion change strategy altogether?
9.3 Career Situation: What Would You Do?
Times are tough at your organization, and, as the director of human resources, you have a
problem. The company’s senior executives have decided that 10% of the payroll has to be cut
immediately. Instead of laying off people, you would like to have everyone cut back their work
hours by 10%. This would cut the payroll but let everyone keep their jobs. You’ve heard this
idea isn’t popular with all the workers. Some are already grumbling that it’s a “bad idea” and the
company is just looking for excuses to “cut wages.” How can you best handle this situation as a
change leader?
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
Teaching Notes
In this section, ideas, exercises, and assignments are provided to assist you in integrating the
concepts in Exploring Management for your students, especially the special features of the text.
Management Live: “Go Along to Get Along” Culture is a Danger Signal
“Don’t tell the boss”… “Don’t bring it up.” These are warning signs of what experts call “a
tendency for people in large, hierarchical organizations to tell bosses what they want to hear.”
GM’s new CEO, Mary Barra was blindsided when historical product safety problems hit the
news. She claimed a culture of the “GM nod”–agree but take no action, and the “GM salute”–
directing responsibility to others, encouraged covering up rather than confronting problems. The
Wall Street Journal calls this a culture of “go along to get along.”
Choices: Core Values Deserve a Close Look
Have you had your Clif Bar today? Lots of people have, thanks to a long bike ride during which
Gary Erickson decided he just couldn’t eat another of the available energy bars. He went back to
Ethics Check: Hidden Agendas in Organizational Change
Sharing power is a popular choice when implementing a change strategy and is an approach that
can generate a lot of good ideas and helps establish all-important “buy–in” to support the
proposed change. But what happens when the ideas offered and the ensuing conversations move
in a direction that top management thinks is wrong?