ORGANIZATIONAL CULTURE Organizational Culture and Leadership, 3rd Edition

WHAT LEADERS NEED TO KNOW ABOUT HOW CULTURE CHANGES 317Summary and ConclusionsI have described various mechanisms and processes by which culturechanges. As was noted, different functions are served by culture at differentorganizational stages, and the change issues are therefore differentat those stages. In the formative stage of an organization, theculture tends to be a positive growth force, which needs to be elaborated,developed, and articulated. In organizational midlife the culturebecomes diverse, in that many subcultures will have formed. Decidingwhich elements need to be changed or preserved then becomes one ofthe tougher strategic issues that leaders face, but at this time leadersalso have more options to change assumptions by differentially rewardingdifferent subcultures. In the maturity and decline stage, the cultureoften becomes partly dysfunctional and can only be changed throughmore drastic processes such as scandals and turnarounds.Culture change also occurs from the entry into the organizationof people with new assumptions and from the different experiencesof different parts of the organization. For purposes of this analysis,those changes are captured in the observation that organizations differentiatethemselves over time into many subcultures. But the importantpoint to focus on is that it is within the power of leaders toenhance diversity and encourage subculture formation, or they can,through selection and promotion, reduce diversity and thus manipulatethe direction in which a given organization evolves culturally.Cultural change in organizational midlife is primarily a matter ofdeliberately taking advantage of the diversity that the growth of subculturesmakes possible. Unless the organization is in real difficulty,there will be enough time to use systematic promotion, organizationdevelopment, and technological change as the main mechanisms inaddition to normal evolution and organizational therapy. What canleaders do to speed up and systematically manage such culturechange? In the next three chapters we will examine both the theoryand practice of planned culture change.