Trying to Change Organizational Culture - Essay Example

ive aspects of corporations, such as culture, are “vitally important for the organisation because of its impact on performance” (Molenaar, Brown, Cail and Smith qtd in Cameron and Green 221). These elements have also long been regarded as significant in analysing, directing and, more specifically, changing organizational behaviour, although scholarly opinions on the role of culture in changing organisations are divided. In mainstream business and a large body of academic literature it is portrayed as an effective ‘change management’ tool, underpinned a number of different ‘cultural’ models (Hofstede, Deal and Kennedy, Handy, Schein, Trompenars and Coffee and Jones, qtd in Carnall 311-314), but others have challenged this view as failing to probe culture in sufficient depth. In a 1983 paper, Smircich proposed that culture had significantly greater complexity than thus far understood and highlighted the distinction between organizations ‘having a culture’ and ‘being a culture’, the latter consisting of cognitive, symbolic and discursive elements. She also gave greater prominence to ‘sub-cultures’ and other complexities, all of which may provide significant barriers and make culture potentially resistant to ‘managed’ change (339-358). Such a rejection of ‘manipulation’ and ‘management’ of culture is based on the belief that this merely brings about changes in behaviour, which are not deep and do not touch ‘high’ culture (Ogbonna and Wilkinson qtd in Ogbonna and Harris 273-288). Schein acknowledges that barriers to cultural change exits but he links these to the premises from which change programs start and insists that the focus must at all times be on the organisation and its challenges and not on cultural change per se. Schein also highlights that “if we want to change culture, we need to understand how it is created” (qtd in Cameron and Green 221). Much of this debate appears also to be centred on different interpretations of ‘organisational culture’ and on whether changes need to occur at the ‘highest’ cultural level to be effective, an issue that is beyond the scope of this paper. What is clear though, is that there are at least two distinctly different approaches to the possibility of ‘management’ of organizational culture, if the popular management literature, which has wholeheartedly embraced that culture can be changed, is to be disregarded. The first poses that change is possible under certain circumstances, of which group Stein is a prominent representative (chapters 17-18), based on (a) a thorough understanding of the concepts of culture, (b) a detailed understanding of the existing organisational culture (c) comprehension of other variables that may produce different basic conditions that will affect change, such as the age of companies, early leader influence and a history of successes or failures. Once all these pre-requisites have been fulfilled – and only then - it may be possible to change culture through a six step, mainly leader-driven program‘. As has been shown above, there is significant emphasis on assessment as a basic necessity, stressing the importance of understanding of values, belief systems and needs of employees at every level of an organisation as well as the group or groups they belong to. To facilitate this analysis, several scholars have developed assessment ‘inventories’ (Carnell194; Schein 337 pp; Petry 1). This is designed to lead to deep understanding of existing cultural undercurrents, feelings about change and to a measurement of positive or negative group reactions. This is also the change element that is considered to be most significant from an HR perspective and will be the focus of this paper in later organisational assessments. The second approach rejects that culture can be changed, suggesting that culture is embedded too deeply in individuals and groups and dynamic cannot be altered by deliberate intervention (Anthony, Knights and Willmott; Ogbonna, Legge and Willmott qtd in Ogbonna et. al 1). This is largely based on theories of culture as a phenomenon of ‘emergence’, which precludes intervention. Therefore the most leaders can do, is to provide additional ‘connections’, of which individuals and groups may avail themselves to bring about voluntary change – an unpredictable and lengthy process. Academic research in this area is not prolific and it would appear that where it has taken place, failed attempts of changing organizational culture were not subjected to rigorous examination against existing change theories. It would moreover appear that at the root of this rejection of cultural change lie arguments about definitions of ‘culture’, which would need to be clarified and clearly much more research is needed. For the purpose of this paper, to categorically state that organizational culture cannot be changed, would therefore be premature The ambiguities pointed out above can be demonstrated through a case study by Ogbonna et. al (1). The study used qualitative methods, such as observation, reports from informants and researcher participation. The selected organization was a food retailer, Westco, and the declared reason for the organisational change was ‘market repositioning’ to ensure future growth. The future direction the company was bound up in a ‘Westco Consumer Promise’, which identified the type of desirable future customer and translated this into ‘roles’ for each group or department. For this purpose, teams were developed, to determine the changes needed at each level, in all areas of business operation. What appears to be absent from this initial assessment stage is Schein’s deep ‘cultural’ analysis to ascertain the genuine beliefs and feelings of staff at all levels about the merger and ‘their’ individual vision for the Westco of the future, although the researchers did not flag this omission. The next phase, ‘re-invigoration’, consisted of learning workshops, where it appears that managers were ‘encouraged to understand’, ‘told’ to believe and in general it seems ‘educated’ about why the company had changed. As this took place well and truly ‘after the event’, it can hardly be considered an effective preparation prior to the change. As the researchers pointed out, this took on an almost ‘Orwellian’ character, clearly not addressing any deeper layer of beliefs, from a cognitive, discursive or symbolic perspective (Smircich 339-358). Subsequent assessment of changes that had taken place, showed superficial results only and amounted more to contrived behaviour than to deep and lasting change. Research assessment was surprisingly uncritical towards the methodology used by Westco and the findings amounted to the presence of ‘resigned compliance’ rather than real change having taken place. This assessment may well have been correct, however, the result is clearly to a large extent due to the poor implementation process that this company underwent, to the absence of an understanding of employees cultures and sentiments, all of which would have brought to light, prior to the change implementation, that even at upper management level there were different beliefs in circulation, about the nature of and reasons for change (Ogbonna 1). Thus, the problems that arose from this poor preparation were later exacerbated by the absence of uniformly supported goals by leadership throughout the change (Schein 225). This case study has therefore done little to make clearer the issue surrounding the immovability of culture, especially since the researchers did not test the validity of other theories. If an approach that views organisational culture as changeable under certain conditions is to be discounted, then research must prove that the theories underpinning this approach are ineffective. Clearly this has here not taken place. Lack of preparation for organizational cultural change would generally appear to be the issue in a majority of cases, particularly where it pertains to Mergers & Acquisitions (M&A’s), where McManus & Heggart (qtd in Bates and Badrtalei 1) put the failure rate as high as 77%. There is no shortage of ‘big names’ on the failure list but it is outside the scope of this paper to address more than one case – the merger of Daimler Benz and Chrysler into Daimler Chrysler. At the time of the merger both were convinced that they needed each other to survive into the future. These were the public motives but behind the scenes a much more complex scenario was played out, of which Vlasic and Stertz provide a detailed narrative account (12-18, 22-26). Some of the facts thus revealed were that Chrysler was facing a hostile take-over and was therefore under time pressure to act. This throws light on its acquiescence into some of the more outrageous demands by the CEO of Daimler-Benz, Juergen Schrempff, who is generally believed to have been motivated to undertake this acquisition due to having succumbed to ‘merger mania’ (Bates and Badrtalei 1). It is already clear at this point that these are hardly ideal pre-conditions for a successful merger, on either side. It comes therefore as no surprise when examining the due diligence process, that an analysis of the respective corporate cultures is conspicuous by its absence, although Horwitz insists that it is paramount that ‘due diligence’ takes place prior to acquisition or merger and that it include assessment of organisational cultural values (Horwitz et. al qtd in Bates and Badrtalei 1). Schein points out that there was already disagreement between the two companies at a ‘much higher level of abstraction’ than culture, namely at basic human level, when it came to the meaning of truth (137), as evidenced by the publicly acknowledged ‘lies’ by Schrempff when he ‘confessed’ that it had never been his intention to enter into a ‘merger of equals (Captain Kirk calls in the cleaners). In addition, Chrysler and Daimler-Benz had cultural differences on the level of ethnicity, nationality and management style, which translated into widely diverging organisational cultures. Chrysler had recently successfully restructured, transforming itself into a highly successful company, where employees and where energy, enthusiasm and pride pervaded a less bureaucratic organization largely drove processes. In addition, their products were manufactured for a mass market of middle-income-earners, in stark contrast to the Germans, who looked back on more than half a century of marketing prestige vehicles into an elite market. In German companies, there is also much less transparency between strict levels of hierarchy ‘determined by titles’, different managements styles and different general organizational rules. In such very distinct environments, organizational culture is more likely to be a ‘root metaphor’, than a variable (Smircich 339-358) with all three of Linda Smircich’s ‘root metaphors’ present. The ‘system(s) of shared cognitions or a system of knowledge and beliefs’ from a cognitive viewpoint, manifested in many ways but particularly visible through the concept of ‘failure’ in both companies, with a blame culture existing in German culture, whereas Chrysler employees perceived it as challenge and opportunity. The ‘systems of (observable) shared symbols and meanings’ visible in the languages, informal and formal behaviour and a variety of codes and practices, that were unique to each of the cultures. Psychological processes are less obvious but can perhaps be thought to having manifested themselves at least on the German side through the unconscious acceptance of lies and deceit as ‘a way of doing business’, with ‘the end justifying the means’ (Smircich 339-358). The vital lesson learned from the foregoing example then is that ‘culture assessment’ is at the core of understanding and that means down to the level of “visible artifacts, espoused beliefs, values, rules and behavioural norms, and tacit, taken-for-granted basic underlying assumptions” (Schein 342-346). Overall, it is clear that little theoretical knowledge was ever applied to the process of merging the two companies and that, in addition, Schrempp and his managers violated many of the issues on Schein’s ‘do not’ list for managers (Schein 417), rendering their leadership a hindrance rather than a help. And yet, in popular and business literature this merger has joined the ranks of those that did not succeed due to a failure of adjustment of the ‘organisational cultures’. It would appear that a more discerning approach is needed in the assessment process of successes or failures. Some of the issues that have plagued this previous M&A are also found in ostensibly successful mergers, although to a much lesser extent. Thus, there were clear indications of good planning right from the start of the 2002 Hewlett-Packard-Compaq merger. When it was first proposed, the existing HP organizational culture reflected the unconventional values of its founders – albeit in modified version - "Management by Objectives", "Management by Wandering around" and "Total Quality Control". Coupled with high job security, team work and share options, this represented an almost ‘bohemian’ culture with a large safety net, ‘buffering’ its employees from the turmoil of business (LaPlante 1). This unique organisational culture was under threat, however, from the changing business environment. What once had been designed for a company of engineers, now had to survive in an environment of shorter product life-cycles and lower profit margins’ (LaPlante 1) Compaq by. Given this scenario, HP embarked on preparing its employees prior to the merger, with up to 1,500 people working to map out goals and processes as well as detailed steps of the how and how long of the integration (LaPlante 1). There is no clear indication as to the ‘cultural’ content of these preparations but since they were excessively detailed and management professed knowledge of organizational cultural differences, it may be assumed that ‘culture’ was also high on the agenda. This meant that a lot of the ‘first year’ issues of corporate marriages had already been resolved. By 2004, however, share prices were plunging and the CEO Fiorina was removed from office, with cracks appearing in the integration, highlighting omissions, which mainly amounted to management not having followed through and having declared ‘victory’ two years into the merger (LaPlante 1). That such a move is dangerous, has been clearly indicated in many of the change models that underpin earlier theory, among them the ‘Kotter 8-step change’ model, which emphasises consolidation at step 7 and warns against declaring too early that ‘it is all over’ (Kotter qtd in Campbell and Green 100-101). What has clearly transpired from the foregoing is that most attempts at organizational change and specifically cultural change are not based on any clear change theory, cultural or otherwise. It is difficult to assess to which extent CEO’s simply follow ‘guru’ literature, rather than taking advantage of academic research in these areas, but it is clear from the above examples and from the high failure rates in both innovation and M&A’s that there rarely is clear direction. This should not, however, immediately mean that applying ‘cultural change theories’ would invariably lead to success. Nor does it mean that they do not work because culture cannot be changed. Until there is a substantial body of research that supports either one of these approaches to organizational cultural change – after testing opposing available theories - it is premature to confirm one or the other. In the face of the large failure rate that occurs when preparation is poor, however, it would seem to make more sense to adopt those theories that offer assessment and ‘change implementation’ processes, rather than taking a negative approach and rejecting intervention in organisational cultures altogether. It would seem that, regardless of the reasons for undertaking these processes, understanding as much as possible about employees, offering all stakeholders a voice, and developing sensitivity towards the impact of leadership, can only benefit organisations under any circumstance. Reference List Bates, Donald L and Badrtalei, Jeff. Effect of Organizational Cultures on Mergers and Acquisitions: The Case of Daimler Chrysler. International Journal of Management, June 2007. Web. 22nd December 2010. Captain Kirk calls in the cleaners. The Age http://theage.drive.com/motor-news/captain-kirk-calls-in-the-cleaners-20100823-13h84.html. Web 23rd December 2010. Cameron, Esther and Green, Mike. Making Sense of Change Management: A complete Guide to the Models, Tools & Techniques of Organisational Change. London: Kogan Page, 2005. Print. Carnell, Colin. Managing Change in Organisations. 4th edn. London: Pearson Education. 2003. Print. LaPlante, Alice. Compaq and HP: Urge to Merge was right. Stanford Business Magazine on-line. Nov 2007. Web. Ogbonna, Emmanuel and Harris, Lloyd C. Managing Organizational Culture: Compliance or Genuine Change? British Journal of Management, Vol 9 Iss 4. 273-288. 1988. Web 14th December 2010. Petry, Ed. Assessing Corporate Culture. ETHIKOS AND CORPORATE CONDUCT QUARTERLY, Iss: March/April 2005. Web 10th December 2010. Schein, Edgar. Organisational Cultures and Leadership 3rd ed., 2010. San Francisco:Jossey-Bass. Print. Smircich, Linda. Concepts of Culture and Organizational Analysis. Administrative Science Quarterly. Organizational Culture. Vol. 28 No. 3. Pp 339-358. Web. Cornell University. Vlasic, Bill and Stertz, Bradley A. Taken for a Ride: How Daimler-Benz drove off with Chrysler. 2001. New York: Harper Collins Publishers Inc. Print. Wilson, Alan. Understanding organizational culture and the implications for corporate marketing. European Journal of Marketing.
Vol 35. No. ¾. 2001. Pp. 353- 367. Web 12th December 2010. Read More