Cultural Change at Henz - Case Study Example

Student: ID: Tutor: Course title: Course code: Institutional affiliation: Date of submission: Table of Contents Cultural Web 3 1 Introduction 3 2 Cultural change at Henz 3 2.1 Myths and stories 3 2.2 Rites and routines 4 2.3 Organization 4 2.4 Power of structures 5 2.5 Control systems 5 2.6 Symbolic aspects 6 3 Key forces for change 6 3.1 Need to increase profitability 6 3.2 Need to make employees content with their work and motivated 7 4 Forces against change 7 4.1 The old organizational culture 8 4.2 Complacency in the management 8 5 Key strengths of the new culture 8 6 Aspects that need to be monitored and sustained to ensure the organization does not fall back to complacency and old ways of thinking 10 6.1 Leadership 10 6.2 Creativity and innovation 10 6.3 Organisational structure 11 7 Conclusion 11 References 12 Cultural Web 1 Introduction Organisational effectiveness in terms of achieving financial goals and other goals such as employee satisfaction is closely linked to the kind of an organisational culture an organisation adopts. A culture that encourages inclusion and promotes creativity and innovation in an organisation is more prepared to changes in business environments and offers an opportunity for the organisation to exploit opportunities and utilize talents for the benefit of the organisation. A culture that is contrary to this will most definitely work to lower employee morale, stifle creativity and consequently make the organisation a loss making entity and ultimately a failed one (Schein, 2004; Madu, 2008). It is in light of this understanding that this paper seeks to use the cultural web framework to analyse organisational change as highlighted by a case study on culture changes at HENZ Australia. This will be achieved under appropriate headings and subheadings. 2 Cultural change at Henz The cultural web can help a company do an extensive audit of its practices in relation to organizational culture and effectiveness (Graetz, Rimmer, & Smith, 2012). 2.1 Myths and stories The organization recorded a 50% top line growth for the year 2004 just one year after Widdows assumed his position. There was morel than 200 products launched while staff turnover rate had dropped from 33% to a low of between 7 and 10%. This shows that the new culture had changed employees’ attitude towards their work and also improved their efficiency and creativity at the work place. 2.2 Rites and routines From the case study, it is clear that Henz had over the years cocooned into a risk averse organization whose top management has been riding on a strategy of consolidating the gains that the company has made. While this may prove to be a wise strategy in the short run it is a clearly bad strategy in a world that is rapidly globalizing. Business environments don’t remain static but are rather as dynamic enough to bring on board new competitors and product substitutes in the market. As such businesses need to constantly innovate in product offering and production/organizational systems to remain ahead of the competition (Bass & Avolio, 1994; Schein, 2004). This is the culture and attitude that was missing at Henz when Widdows was appointed managing director. Widdows became aware of the negative, low risk and punitive culture that was existing at Henz. After a short while with intense changes, Widdows was able to achieve organizational effectiveness through introduction of a culture that rewards innovation and creativity in employees. This made the company an innovator especially in new products development and consequently increasing revenue from the wide array of products offering. 2.3 Organization Widdows sought to make Henz ‘a great place to work’. To do this, Widdows had to encourage employees’ contributions into their idea of a great place to work. With this kind of people management, the top management is able to maintain close relationship with the bottom as well as the middle tier employees helping to make everybody pin the organization feel a part of the team that is the organization with the intentions of achieving the set organizational objectives. Employees being humans feel motivated to work in an organization where they are valued and have a sense of belonging as pointed in the McClelland’s theory of motivation. It also important to note that changes will be less objected to by employees either passively or actively when the very employees are involved in decision making and long term strategizing efforts in an organization (Bond, 2004; Robbins, Judge, Millet, & Boyle, 2011). 2.4 Power of structures Widdows has been able to achieve the development and implementation of an organizational culture that values individual creativity and how it can be nurtured by the organization to help the organization achieve its goals. It is a win-win situation for both the organization and the individual. One is able to achieve personal achievement and relevance e in life by being given room to be creative and make mistakes. 2.5 Control systems Widdows management has also given employees autonomy and freedom to perform their duties in the organization provided they are well aware of their responsibilities. The organization now has limited supervising of employees but gives the responsibility to the individuals themselves by believing in their competencies and loyalty to organizations goals. This culture will go a long way into defining Henz as a great place to work considering the top management’s approval of Widdows new management style and new brand of organizational culture in the Australian Henz business. 2.6 Symbolic aspects Henz want to position itself as a company that prides itself of valuing its employees by making Henz the best place to work in not just in Australia but worldwide as the parent company is planning to take the initiative to its global businesses. The company wants to reiterate its commitment towards valuing a committed and engaged workforce above all things to ensure continuous innovation. 3 Key forces for change From the case study, it is right to conclude that change was inevitable in the Henz Australian business given the controlling company’s low tolerance to unprofitable businesses. All the same change is never desired even when it’s intended for the greater benefit of all involved (Mabey & Lees, 2007). Some of the forces for change include; 3.1 Need to increase profitability As mentioned before in this paper, it is vital that businesses continually innovate to dilute the risk posed by competitors in the industry (Bass & Avolio, 1994). It is even more vital for a business that is having long term projections in terms of returning value to investors who have little patience with their investment. That was the case with Henz before Widdows came in. The business was making less that expected profit from its operations in addition to the high cost of hiring and orienting new employees into the company due to the high turnover of 33%. This is a major force for change that backed the resolve of the new managing director. To achieve it the manager had to encourage creativity and innovation in the workforce in addition to motivating them to give maximum productivity. The manager had no other option but to bank on such changes to achieve profitability for the business. 3.2 Need to make employees content with their work and motivated This is another major driver for change considering the company was suffering from a high rate of turnover which is not good for the organizational culture if one was to consider that organizational culture takes time to grow but can be lost very quickly much to the disadvantage of the organization as noted by Schein, 2004. Motivated employees are also capable of overcoming challenges and taking the organization beyond what the management think it could go (Latham, 2007). Widdows had no option but to think about a culture that nurtures creativity and involves employees actively in coming up with the ‘organisation’s way of doing things’. With such a change, it is possible to achieve team spirit and motivation in employees and reduce dissatisfaction as argued in Herzberg’s motivation theory (Kanfer, Chen, & Pritchard, 2012). This would ultimately reduce turnover rate in the organization to between 7 and 10 % as noted in the case. 4 Forces against change While change in this case resulted in the betterment of the organization in terms of organizational culture and financial outlook, it is obvious that there were some forces against the change. 4.1 The old organizational culture This is the main force against the change. It is difficult to unfreeze culture once it has been instituted, the culture defined the ‘organization’s way of doing things’ which is not substitutable with new ways of doing things especially in the top management ranks. The employees were also sceptical of Widdows ideas given their long understanding of how the system functions. If this force is overcome through persistence and commitment to cultural change, then the intended changes are going to be effective. 4.2 Complacency in the management This is also another key force against the changes as noted from the employees’ cynicism of the new changes. While the changes might be well intended there is no guarantee they will become ‘a way of doing things’ for the organization to move beyond Widdows supervision and become institutionalized. Bureaucratic organizational structure is also a major force against change. This is what Widdows noted as a complex structure that caused confusion and slowed uptake of ideas and implementation of strategies. Such structures only serve to alienate employees from the top management and as such consultations and sharing of ideas to solve problems and take advantage of opportunities is always slow or not achieved at all (Longenecker, 2013). 5 Key strengths of the new culture The new culture at Henz under the leadership of Widdows has been able to achieve tangible results in terms of increase in product portfolio, projects and profitability for the company. It can therefore be concluded that the organization culture as it is now is better than it was before Widdows came in. the key strengths of the new culture are; High level of engagement between the employees and the top management is now possible. This is what boosts employees’ confidence to be creative as noted by Widdows. A structure with less bureaucracy ensures smooth flow of information and ideas to build cooperation between all levels of an organization (Longenecker, 2013; Blundel, 2004). Tolerance to creativity is another key strength of the culture; the new culture does not condone complacency and seeks to continually innovate by giving employees a chance to convert their ideas in products and concepts that are beneficial to the firm. The culture has also enhanced team spirit and motivation amongst employees. The new mantra of making Henz a great place to work in is kept alive by the fact that the senior management supports it and allows employees views on how Henz can be made a great place to work. The employees feel motivated to work and give their maximum effort to help Henz achieve its objectives. The culture has also allowed for observable outcomes (artefacts) of the new way of doing things. There are initiatives such as paid gym sessions, annual medical check-ups and a flexible working week that allows staff to leave early on Fridays during the months of daytime saving once their work is done. 6 Aspects that need to be monitored and sustained to ensure the organization does not fall back to complacency and old ways of thinking 6.1 Leadership Leadership makes the great difference between a successful organization and a failed organization. Successful organizations have visionary leaders who seek to inspire their followers towards some set objectives in a way that will make the followers achieve more than what they thought they could achieve (Schein, 2004; Denison & spreitzer, 1991). Widdows leadership offered a new opportunity to employees to contribute directly towards strategic progression of the organization towards it goals. It is the same leadership that help bring on board the debate on how Henz can be made a great place to work. This shows clearly that leadership offers al chance or a platform to progressive debates and actions. Poor leadership on the other hand stifles creativity and morale to such an extent that an organisation fails to utilize its potential while valuable talents get wasted by bureaucratic leadership that favours status quo at the expense of progressive change (Mabey & Lees, 2007). 6.2 Creativity and innovation Creativity and innovation are the engines that run successful brands and organisations in the full reality of dynamic economic environments, changing consumer preferences and ever unpredictable competitive nature of today’s opened up business world. If organisations don’t innovate by allowing creative minds within to do what they do best, the highest probability is that others with radical new ideas will overtake them (Denison D. R., 1990). Henz must monitor creativity and innovation in terms of tangible elements such as number of successful products launched into the market and cost cutting measures implemented. Employee satisfaction is another way of monitoring whether the organisation is indeed allowing employees to be creative and make mistakes without fear. 6.3 Organisational structure The structure an organisation adopts, determine how people in the organisation are going to relate with one another and how communication is achieved within the organisation (Longenecker, 2013). Complex organisational structures may result in confusion as noted in the case study and may also limit the organisations ability to be dynamic and responsive to changes in the external environment. This often puts the organisation at a disadvantageous position in regards to reacting to competitions and also in taking advantage of opportunities (Madu, 2008). Widdows has ensured there is adequate communication between the management and the employees by simplifying the organisational structure to such an extent that adequate interaction between people in the organisation is achieve especially in matters relating to making Henz a great place to work. This needs to be monitored regularly by the management to ensure that over time the management does not slowly revert back to its old position where it was out of touch with the needs and aspirations of their employees in regards to working in the organisation and achieving effectiveness and success in the organisation. 7 Conclusion From the analysis of the Henz case study it is evident that Widdows management style has introduced a new organisational culture that promotes creativity, innovation and harmonious working between employees and the top management. It has also ensured cooperation in key areas such as organisational culture development and strategy development. This culture was nonexistent and has resulted in massive results for the company in terms of employees’ satisfaction, staff turnover and ultimately profitability for the company. Creativity, leadership and organisational structure are issues that need to be sustained to maintain the same success being enjoyed now by the organisation. References Bass, B., & Avolio, B. 1994. Improving Organizational Effectiveness Through Transformational Leadership. SAGE. Blundel, R. 2004. effective Organisational communication: Perspectives, Principles and Practices. London: Prentice Hall. Bond, S. 2004. Organisational culture and work-life conflict in the UK. International Journal of Sociology and Social Policy , 24 (12), 1-24. Denison, D. R. 1990. Corporate Culture and Organizational Effectiveness. New York: John Wiley and Sons. Denison, D. R., & spreitzer, G. M. 1991. Organizational culture and organizational dvelopment. research in Organisational change and Development , 5, 1-21. 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