Organisational Culture - Essay Example

?Running Head: Organisational Culture Organisational Culture [Institute’s Organisational Culture Introduction When a recruit enters the first time into the boot camp of US Marine corps, the drill instructors and others put in all their energy to teach them the “Marine Way”. During the first few weeks of the training in Marine Corps, all the training attempts are focused at psychologically stripping down the recruits, ensuring that they “unlearn” their previous knowledge, tools, approaches, and methods and deconstruct their personality and thinking styles so that they could think in the “Marine Way”. Within a few weeks, these recruits become the real and live picture of the values, beliefs, and objectives of the Marines (Cameron & Quinn, pp. 36-37, 2011). In a much less dramatic way, organisations have their own ways of accomplishing their tasks and achieving their objectives. Edgar Schein, a noted expert in the field of organisational behavior, defines organisational culture as, “a pattern of basic assumptions, invented, discovered, or developed by a given group as it learns to cope up with its problems of external adaptations and internal integration. That has worked well enough to be considered valuable and therefore, to be taught the new members as the correct way to perceive, think and feel in relation to those problems” (Yanow, Ybema & Sabelis, pp. 13-14, 2011). Important here to note understand is that organisational culture is not something which is absolute or definite, but as the interpretivists assert, that things as not as they are but as people want to see them. There are different manifestations of organisational culture, which go on to include, organisational structure, pay plans, communication patterns, leadership, norms, behaviors, rules, rituals, procedures and others, but despite the fact that these manifestations are the same in theory for every individual, their interpretations may be different (Brenton & Driskill, pp. 25-26, 2010). Therefore, different individuals may interpret an organisational culture that may be same across the board, differently. However, important here to understand is that stronger cultures have the capacity to suppress these differences in interpretations but weaker cultures may allow several different interpretations, some of which may be in complete contradiction with the real culture. During the last days of Enron and WorldCom, there was no trace of any organisational culture (Cameron & Quinn, pp. 36-37, 2011). People would go on to establish their own boundaries, rules and approaches and a former employee at Enron labels those days as a “roller coaster ride at the height of craziness”. On the other hand, employees of companies like Google, Nike, UniLever, Procter & Gamble, Pepsi, Coca Cola, Wal-Mart, Merck, Levis Strauss and others are more likely to know what their companies stand for and what is their way of doing things (Yanow, Ybema & Sabelis, pp. 13-14, 2011). This paper is an attempt to explore the concept of organisational culture, more importantly, with the practical example of Semco, a Brazilian success story. Most of the paper will focus on introducing the company and explaining in culture with different elements of its culture. Furthermore, the paper will also briefly attempt to apply a few models and theories of organisational culture on the company allowing having a better understanding of Semco’s organisational culture. Discussion Company History and Profile Semco was a small bureaucratic company from Brazil, founded in the year 1953, started off with specializing in the business of manufacturing centrifuges for the vegetable oil industry. During the1960, the company jumped into the business of hydraulic pumps, load pumps, axles and other components for the naval industry, considering the growth of Brazilian naval industry. Antonio Kurt Semler, an Austrian engineer and the founder of the company always wanted his son Richardo Semler to take interest in the company’s operations and take over after his father’s retirement. Richardo joined the company with the post of assistant to board of directors but he was disappointed to know that his real authority was even less that of a line manager (Cameron & Quinn, pp. 36-37, 2011). Richardo was a huge proponent of participative management, innovation, employee empowerment, corporate democracy, and managing with a theory Y style. Furthermore, he believed that it was time for the company to look for other markets, diversify, and innovate, since the primary market of the company of naval industry products was quickly cooling off. The board of directors, like Semler’s father were people of old ideas and they did not believe in rapid change and modern techniques. Instead, the bureaucratic, risk averse, calculated and employee-controlling attitude appeared to them as the best fit for the organisation (Driskill & Brenton, pp. 10-14, 2005). Semler immediately left the company and went to Harvard for his MBA. When he came back, he was all set to pursue a career in the field of music with starting his own band but his father made an interesting decision which changed not only the fate of the company but also allowed the corporate world and the world of management to witness a brand new management philosophy. Antonio resigned from the company, went on a long vacation to Europe, transferred all the powers to his son, whose management style was entirely different from that of his father and told him “Son! Do what you want to do” (Pfister, pp. 18-19, 2009). On the very first of taking charge of the company, Semler fired more than 60 percent of the company’s top managers in order to flatten the company’s structure. However, his reforms became even stronger when he was 25 and he fainted in one of factories of the company due to working very hard and unhealthy environment of the factory. This trigged a huge transformation in the thinking and approach of Semler as he decided to focus more on ensuring a better work life balance for its employees which has gone on to become one of most important manifestations of Semco’s culture (Brenton & Driskill, pp. 25-26, 2010; Schein, pp. 411-415, 2010). Since the day Semler joined the company, he saw that there were rules, tasks, and responsibilities defined for everyone and all the employees appeared to be doing their jobs. However, despite all the salaries, benefits, rewards and others, they were not happy. Semler wanted to do things differently. He expressed his transitional thoughts in his 1994 article in the these words, “I couldn’t help thinking that Semco could be run differently, without counting everything, without regulating everyone, without keeping track of whether people were late, without all those numbers and all those rules, what if we could strip away all the artificial nonsense, all the managerial mumbo jumbo? And what if we could run the business in a simpler way, a more natural way” (Semler, pp. 5, 1989)? From 1992-2006, the company posted double digit growth every year. The company employed only 90 people when Semler took the charge of the company and now it employs more than 4000 people. Semco today is a much-diversified company, which is engaged in the business of telecommunications, solar energy, satellite manufacturing, electrical and engineering equipment, real estate and property, robotics and others. During the 1990s, Brazil went through one of the worst phases of its economic and political history (Driskill & Brenton, pp. 10-14, 2005; Schein, pp. 411-415, 2010). Negative growth and rising prices posed the threat of hyperinflation in the company and in order to cope up with the same, the company tightened the money supply thus putting a cap on the growth, creating a credit crunch, and forcing many into bankruptcy. Rather than initiating mass layoffs, Semler decided to work with the employees (Robbins & Judge, pp. 352-353, 2010). Employees and the company agreed on increasing their share of profits, wage cuts and decreasing management salaries by more than 40 percent. Employees were empowered to take control of the operations and approve every single item of the expenditure. Today, the company is one of the icons in Brazil, expanding even as of today and Semler is seen as the guru of a new approach in management, the approach that literally treats employees as family and the company as home. Semler’s approach of participative management has remained the focus of research and attention from experts, academicians, and researchers from all over the world (Joanne, pp. 85-89, 2002). Manifestations of Semco’s Organisational Culture When Semler took control of the company, he started receiving constant complaints regarding the food in the cafeteria. The company has tried its best in the past as well to solve this problem. Semler also did everything in his capacity to provide, healthy, fresh and state of the art food in the cafeteria according to the demands of the employees but the issue did not appear to resolving (Griffin & Moorhead, pp. 185-186, 2011). Finally, Semler gave the control of cafeteria food to the employees and within a few weeks, the problem disappeared as if it never existed. Since that day, employees at Semco solve their own problems. They have the resources, they have the authority, power, and control, and they do not bother to disturb their managers because they know that if they do, they would be asked to do it by themselves. “Employee empowerment” is the mantra that defines a significant portion of Semco’s culture (Daft, pp. 98-99, 2009; Heller, pp. 1, 1995). Semco does not believe in controlling their employees with rules, patterns, code of conduct and regulations. Instead, they have freedom to do anything and define their own limits until and unless, their own liberty starts restricting the liberty of others (Dickson, pp. 103-106, 1993). There is no dress code and employees can wear wherever they want until and unless it becomes disturbing or offensive to others. There are no defined company headquarters and at every company site, there lavish and widespread gardens have hammocks and employees are encouraged to take afternoon naps if they are feeling sleepy. If any employee has worked during the Saturday, his boos and colleagues will readily allow him to take Monday off so that he could relax (Semler, pp. 206-208, 2004). The offices at Semco are very different from other offices in the world. Rather than separate rooms, glass ceilings, cubicles or floors but there are round tables with four low divides (one could see the person by standing). The environment is so causal that observers have been senior executives of the company sharing their music lists with new recruits and interns of the company. Other than Semler, who is the CEO of the company, none of the employees at Semco has an official job title but all of them are referred as “associates” (Griffin & Moorhead, pp. 185-186, 2011). There is no formal organisational chart of the company, however, whenever there is an urgent need of sketching one, Semler has ensured that pencil is used for that purposes and as soon as the task is over, the chart should be disposed off. Despite the fact that Semler is the CEO of the company, his vote has the same weightage as all other employees (Pfister, pp. 18-19, 2009; Semler, pp. 23, 1994). Semco is also one of those companies that effectively implemented flexi time even for its blue workers working on the assembly lines. Sao Paulo, even as of today, is the eight largest city of the world according to population being the home for more than 11 million people. However, during the 1980s, the city was facing the worst issues in terms of transport and commute. Semler realized that employees had to put in almost 2-5 hours more into their work and neither they nor the company was the beneficiary of those added hours (Daft, pp. 98-99, 2009). The obvious solution was flexi time but the problem was that it did not appear practical. However, Semco made it practical by ensuring that employees could take the charge. The factory workers made teams and divided the responsibilities, assigned hours to each other and made such settlements that there were enough workers on the assembly line at every time of the day to keep the tracks running (Semler, pp. 325, 1993). One of the most interesting and fascinating elements of Semco’s culture is the fact that at Semco, employees set their own salaries. Once or twice a year, there are companywide surveys to determine the relevant pay ranges based on job and market. Then employees are asked to judge themselves that whether or they are making enough contribution to deserve their demanded pay (Dickson, pp. 103-106, 1993; Semler, pp. 64, 1994). If the company feels that the employee is asking for excessively much salary as compared to his or her contributions, for at least a year, the employee is allowed to prove himself or himself. If the employee fails to the company politely asks the employee to either reconsider his demand or look for a company, which could pay the employee his demanded sum. More importantly, each employee of the company has access to the information regarding the pay levels of other employees thus creating a virtual check and balance system through peer pressure (Semler, pp. 206-208, 2004). Semco’s interesting culture also includes its recruitment process, which is a bit different from the mainstream recruitment approaches. There is no Human Resource Department in the company; therefore, the resumes and applications are disturbed amongst all the potential colleagues of the employee who assist in taking the interviews (Schein, pp. 411-415, 2010). Rather than one-on-one interviews, the process starts with group interviews and the shortlisted candidates end up having tons of meetings with the company staff before they receive a formal offer from the company. Semco believes that this approach has allowed the company to keep its average annual turnover for the past three decades at 2 percent when the average annual industry turnover is more than 18 percent (Griffin & Moorhead, pp. 185-186, 2011). During the latter half of the twentieth century, in the lights of Michael Porter, Peter Drucker, Igor Ansoff, Philip Selznick, Alfred Chandler, Ellen-Earle Chaffee, Tom Peters, Nancy Austin, Michael Hammer, James Champy, and other proponents of strategic management created great hype regarding the importance of strategy and strategic thinking. Surprisingly, the entire culture of Semco has been founded in order to negate the philosophy of strategic planning and strategic thinking (Wit & Meyer, pp. 58-59, 2010; Semler, pp. 64, 1994). The entire organisational culture of Semco is such that employees do not feel bounded by the conventional plans and approaches. Semco wants its employees to always think outside the box, challenge the usual thinking patterns, be more creative, and redefine the limits of innovation. Semco is always looking for something unconventional, unusual even what appears on the surface as irrational because the greatest ideas in the world appeared as irrational and illogical to the world. Semco’s culture believes that strategy does exactly the opposite. It binds people to focus on specific goals in specific ways (Robbins & Judge, pp. 352-353, 2010; Heller, pp. 1, 1995). More importantly, Semler has expressed, repeatedly, that there is no formal mission or vision statement of Semco. Furthermore, there are not any goals or targets set for employees, no five-year plans, no code of conduct instead they set their own goals and targets. The basic task given to the company is to innovate, expand, and be as creative as possible. Semler always defines the important values defining the organisational culture of Semco as “I did try to reconstruct the company so that Semco could govern itself on the basis of three values: employee participation, profit sharing, and open information systems.” “Participation gives people control of their work, profit sharing gives them a reason to do it better, and information tells them what’s working and what isn’t” (Ashkanasy, Wilderom & Peterson, pp. 241-242, 2010; Semler, pp. 5, 1989). At another occasion, Semler (1994) wrote about his vision and working ideology, “The key to getting work done on time is to stop wearing a watch. The best way to invest corporate profits is to give them to the employees. The purpose of work is not to make money. The purpose of work is to make the workers, whether working stiffs or top executives, feel good about life” (Schein, pp. 411-415, 2010). Moreover, the management philosophy of Semco lies in ensuring that employees enjoy empowerment, control, and authority over their jobs. Semler once said that, “The key to management is to get rid of the managers” (Semler, pp. 325, 1993). There are ways various ways to characterize different organisational cultures. Researchers and experts have not been able to develop a consensus over these frameworks. For example, one model in this regard is the one, which considers flexibility vs focus and internal vs external. It appears that Semco’s culture will come into the combination of an external focused culture with high level of flexibility (Witte & Muijen, pp. 205-206, 2002). As mentioned earlier that Semco is one of those organisations, which are known for its risk taking approach, entrepreneurial mindset and embracing innovation. Furthermore, rather than looking at the inside for accomplishing its goals and objectives, the company looks outside for inspiration and ideas (Yanow, Ybema & Sabelis, pp. 13-14, 2011). Based on the conflicts and their resolution, the organisational culture of any company may be alienated, democratic, and antagonistic. In an alienated company, formal rules and regulations get more attention than the activity of resolving and bringing up conflicts. Under the umbrella of a democratic culture, stakeholders get a chance to voice their opinion and let the positive energy prevail. However, in an antagonistic culture, the tension and conflicts between the groups and employees reaches to an extreme level since everyone believes that he or she is right and is not ready to settle for anything less (Surhone, Tennoe & Henssonow, pp. 109-111, 2010). Quite clearly, in terms of conflict resolution, Semco’s culture is that of democratic type. In fact, it would not be incorrect to say that Semco has even taken the democratic culture to an even more democratic height (Joanne, pp. 85-89, 2002). Another type of classification of organisational culture could be based upon the risk taking and rewards. First is the work hard where the employees do not take many risks but even if they do, they receive quick feedback for the same. Second, is the macho culture where the employees do not take too many risks, however, the feedback is very quick (Witte & Muijen, pp. 205-206, 2002). The third kind of culture, which resembles greatly to Semco’s culture as well, is the “Bet Your Company Culture” where employees are rewarded greatly on the basis of risk taking, however, the feedback or the results for the same became evident after quite some time. Lastly, there is process culture where people are obsessed with the rules and regulations that there is no risk taking and no feedback. Semco, before Semler’s leadership was almost a process culture (Ashkanasy, Wilderom & Peterson, pp. 241-242, 2010). Conclusion Without any doubts, Semco is a fascinating company and what makes it so interesting and attractive is its organisational culture, which is almost one of its kinds. Even as of today, there are many American and European companies which are researching on Semco, trying to understand the real cause of its success and planning to apply its concepts, approaches, theories and models in their organisations as well. Over the past three decades, under the leadership of Semler, Semco has created such an organisational culture, which is exactly in line with the ideas and vision of its founder (Robbins & Judge, pp. 352-353, 2010). Semco is about realizing the true potential of individuals, helping them in being as creative as possible and doing something different. Even, when the companies, which are highly centralized and extensively controlled by the senior management, want to generate new ideas, be creative, and create something new, they make autonomous teams and allow them to work freely. Semler has just expanded that idea from a few occasional work teams to the entire company (Joanne, pp. 85-89, 2002). Semco has successfully created an organisational culture, which has the capacity to support the organisational goals of the company. Ironically, the most important goal of the company is not to bind their employees with goals, targets and other managerial “mumbo jumbo”. Therefore, the company does not need any radical changes in its culture in the near future; however, the company has to ensure that it is also ready for circumstances, which require centralization, lesser power sharing, and greater direct control of employers over their employees (Surhone, Tennoe & Henssonow, pp. 109-111, 2010). 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