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Culture is not just a management fad. An understanding of cultural effects on an organisation is critical to managing an organisations performance and being able to execute its strategic plan. Research demonstrates that organisations with strong cultures outperform those with weak or poorly aligned cultures to strategic goals and objectives. Having the right culture in place adds meaning to organisational life and builds the foundation for an organisation's mission, vision and core values statement, while ensuring a productive environment for executing the organisations strategic plan. All of these aspects, if well executed, contribute to the bottom line.
The good news is that organisational cultures can be changed, but it can take considerable time. This is particularly the case if steps are not taken to increase the pace at which this change occurs. These steps need to be taken deliberately and decisively using an appropriate framework as a catalyst for the change. While implementing culture change, it is important to remember that the effectiveness of the efforts to change the culture will depend, at least in part, on whether employees and other stakeholders of the organisation view the change as a threat or as an opportunity. Therefore an appropriate environment needs to be created in which members of the organisation can see the benefits of the change for them, both individually and as a group.
Changing an organisations culture is not easy and many will attest to the fact that it does not happen overnight. However, research shows us that through adopting the principles, frameworks and recommendations contained in this report it can be achieved, and once achieved, it will be the foundation of underlying, timeless, fundamental principles through which the organisation will become a truly great enduring company to which all stakeholders will want to belong.
The purpose of this report is to identify, analyse and present ways of changing the existing company culture using well grounded organisational practices, research, and theory. In order to compile this report considerable research, review of existing best practices, theories and comparisons have been made to arrive at the recommended approach. Through this process it has been identified that it is very important to align the culture to the organisations strategic directives. In addition it has become clear that culture can indeed be changed, and this change can be accelerated through using already established frameworks.
The recommended way of changing the culture to be more aligned with the organisations strategic plan and objectives, as outlined in this paper, is to observe the organisations current culture, align its culture with the strategic plan, develop and follow a suitable framework (as recommended on page 8) and back this up with strong leadership, appropriate management tools and communication at all levels of the organisation.
SeaRoad is a privately owned, Australian shipping, transport and logistics service provider operating throughout Australia. The company is relatively new having only been formed in March 2007 from the trans-bass assets of the Patrick Corporation, which it had to divest as part of the acquisition of the company by Toll Australia. SeaRoad has recently undertaken its first strategic planning process. The resulting strategic plan has been ratified by the board of directors and management are now taking steps to implement the plan throughout the company.
Within the company today, a less than ideal organisational culture exists due to the previous ownership and management. An important area identified in the strategic plan is that of changing the existing organisational culture. If the company is going to achieve its strategic goals, then the existing culture needs to change in line with its new core values.
At SeaRoad, people are our most important asset and we are committed to conduct ourselves in accordance with the following core values designed to create a customer focussed, "can do" culture.
Courage and Innovation
Honesty & Integrity
Teamwork & Respect
The purpose of this report is to identify, analyse and present ways of changing the existing company culture using well grounded organisational practices, research, and theory. Recommendations will then be made for changing and transitioning the organisations culture in line with its strategic plan and core values.
Corporate Culture Defined
Culture can be defined as 'a pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems' (Schein, 2004, p.17).
This definition provides an insight as to why and how cultures are formed within an organisation. As humans within an organisation, our culture is formed around things that are a product of our human need for stability, consistency, and meaning. Within business this concept can be translated as 'the cultural paradigm'.
Corporate culture is an area that is not always well understood within an organisation which is surprising given that it forms an integral part of any organisations strategic plan or strategy. Culture is the glue that holds an organisation together and forms its very nature.
The Cultural Web (Johnson, G 1992).
Because corporate culture is really all about individuals forming a group and conforming to a pattern of behaviour, its culture can in fact be changed. As management we therefore have the power to create a culture that is the best fit for an organisations future strategy or direction.
Observing Current Culture
When working towards a strategic plan or goal, a company's existing culture can be the very thing that prevents them from moving forward. Effort needs to be employed in identifying aspects of the existing culture that may impact on the goal that is trying to be achieved. In this case the goal is the implementation of the strategic plan. The necessary actions can then be taken to navigate around possible obstacles in a timely way. In addition the way in which things are done can be altered to capitalise on and make the most of opportunity.
Culture can be observed through a variety of ways. The nature of it can be identified from how staff and management communicate, the way in which the information is communicated, the way in which feedback is given, the way in which performance or lack of performance is managed, and the way in which projects are co-ordinated throughout the organisation. It is also shown through simple things such as the way meetings are held and the way in which interaction occurs with customers and suppliers. It is important to pause and think about the way in which these things are done within the organisation and whether the outcomes are always those that are desired.
Schein states based on his research that 'if we are to decipher a given organization's culture, we must use a complex interview, observation, and joint-inquiry approach in which selected members of the group, work with the outsider to uncover the unconscious assumptions that are hypothesized to be the essence of the culture' (1984, p.12). Schein (1984) goes on to say that it is important to observe the current organisational culture in relation to other variables, such as strategy, organisational structure, management, and geographical location. Schein (1984) argues that before an attempt is made at changing an organisations culture, it is very important to understand the current culture that exists and how it is currently being sustained.
All organisations have their own unique cultures that have developed over time, and even in the case of larger organisations they can contain different cultures within the same organisation. In order to understand what the current culture (or cultures within cultures) is that pre-exists, it is useful to refer to an existing framework. Cameron & Quinn (2006) have developed a useful culture framework built on a model called the 'Competing Values Framework'. They developed this framework from research to be used as a tool to assist organisations in identifying their existing cultures and it is a widely used framework. The framework presents four different main culture types as shown below.
Human relations - Clan Culture (Collaborate)
Contain values, shared goals, cohesion, and participation. The organisation feels like an extended family. The leaders are good facilitators and mentors.
Process - Hierarchy Culture (Control)
Formalised and structured organisation, procedures govern what people do. Leaders are good coordinators and organisers.
Result driven - Market Oriented Culture (Compete)
Oriented towards the external environment. Concerned with achieving market share. Values competitiveness and productivity. Leaders are results driven.
Open system - Adhocracy Culture (Create)
Entrepreneurial feel oriented towards taking risks. Leaders are focused on innovation and delivering creative solutions.
Cameron & Quinn (2006) propose that nearly all organisations have some aspects of each of these cultures; however one aspect will normally dominate. It is important to realise that no one culture is better than the other in respect to this framework, however some might be more appropriate than others depending on what the organisation is trying to achieve in terms of its strategic direction and stated goals.
Aligning Culture for Success
'Some of the riskiest work we do is concerned with altering an organizations culture. Emotions run wild and almost everyone feels threatened, particularly when altering organization structures to facilitate culture change. Why should that be? The answer is that if companies do not have strong notions of themselves, as reflected in their values, stories and myths and legends, people's only security comes from where they live on the organizational chart. Threaten that, and in the absence of some grander corporate purpose and leadership, you have threatened the closest thing they have to meaning in their business lives.' (Peters & Waterman, 1982, In Search of Excellence)
Once a strategic plan has been developed for an organisation, the way in which results are achieved within the group need to be examined and if necessary challenged from the very top to the very bottom of the organisation. This is to ensure that everything that is done from within will help the organisation move forwards towards achieving its strategic plan.
Every part of the organisational culture needs to support the goals of the stakeholders so that the organisation can achieve its strategic plan and associated tasks in the most effective way possible as a group of like minded people working together towards a common goal. One important way to do this is to insure that ongoing communication within the company reinforces the culture that needs to be built. Effective communication will help reinforce this culture.
An important part of building or changing a culture is to have every member of the group in question adhere to the core values that have been chosen for the organisation. This should be non-negotiable and an expectation for all members of the organisation. These core values should be reinforced through positive examples from management, displaying them in the workplace, and communicating them regularly in creative ways.
A crucial aspect of maintaining a culture is to ensure part of the organisations core is built around 'discipline'. Collins (2001) describes that the core of an organisation should be built with disciplined people, using disciplined thought, who take disciplined action. They should be willing to go to extreme lengths to fulfil their responsibilities to the organisation and to maintaining its core culture.
'A culture of discipline involves a duality. On the one hand, it requires people who adhere to a consistent system; yet, on the other hand, it gives people freedom and responsibility within the framework of that system. A culture of discipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined action' (Collins 2001, p. 142).
The key to the ongoing success of the culture being built is to ensure that it is one that others wish to be a part of. This means that it needs to be an ideal one that facilitates high performance in all aspects of the organisation. If the culture is not ideal, and isn't one that gets people excited, then everyone within the organisation need to be involved in evaluation and creation of a more suitable culture.
Proposed Framework for Developing a Suitable Culture
Based on the previous discussion in this report and research while compiling this report, I present below a proposed framework containing six distinct stages for developing the necessary culture within an organisation enabling it to execute on its strategic plan. The same framework could also be used to modify or change an existing culture in an organisation. In addition it would not necessarily have to be used in relation to creating the organisations initial strategy although it would be a useful framework to follow in order to do this.
Observe and benchmark the corporate culture
Focus the organisation
Position the organisation
Translate the strategy into action
Lead the culture
Strong Leadership is Required
The best way to align the culture to the organisations strategic plan is to apply leadership practices that are also aligned and to provide an environment where leadership by example is the norm. Therefore the main source of an organisations culture is the organisations leadership. Employees will become very sceptical of the new culture if all they see is "do as I say not as I do". Leaders at all levels of the organisation need to know what the required culture is and then work on determining ways of implementing practices and procedures that are closely aligned and reflect the desired culture. Ideally this leadership should take place within a framework similar to the one outlined above (section 6).
Leaders within the organisation also need to become role models of the behaviours they wish for everyone else within the company to display and provide the necessary follow up support when it is needed. In this role model approach particular attention needs to be paid to all aspects of communication in both an individual as well as group setting.
Relationships Between Organisational Culture and Effectiveness
Every organisation has the intrinsic need for ongoing improved performance. The only way that this can be achieved is through effective management. Effective management will plan, co-ordinate, communicate and direct the efforts of members within an organisation towards the achievement of common goals and objectives. This management process takes place within an organisations culture.
Therefore culture, which essentially boils down to common values, beliefs, attitudes and ways of doing things will have significant impact on decision making, organisational structure, individual and group behaviour, work performance, motivation and effectiveness at a group and individual level. An example of this is when people say that the culture within the organisation they work for contributes greatly to their stress and ineffectiveness. Or on the other hand it may contribute to their contentment and effectiveness. How many times in an employee interview have you been asked about the prospective company's culture? Clearly employees have now made the link between culture, and their own personal and group performance. It seems that organisational culture plays a large part in determining overall performance and effectiveness.
Roger Harrison et al. (1992) outlines that organisational culture influences the behaviour of both individuals and groups within an organisation, and goes on to say that culture is an important factor in successfully implementing job satisfaction, organisational success and team effectiveness. The right culture can reduce workplace complexity and employee uncertainty and if the culture is consistent so will be the company's direction, values, and processes and procedures for decision making. These are the building blocks for an environment to facilitate improved organisational performance.
Chatman & Cha (2001) suggest that there are three key things that are needed in an organisations culture to build and increase effectiveness:
It must be strategically relevant;
It needs to be strong, compelling and what people consider to be important; and
The culture must have an intrinsic ability to adapt to changing circumstances.
Chatman & Cha (2001) go on to say that for leaders to develop, manage and change an organisations culture to facilitate increased performance they need to use three managerial tools:
Recruitment and selection - employ people who are a good fit for the company's culture.
Social tools and training - develop processes and procedures that enable new staff to understand the organisations values, abilities, expected behaviour in order to participate fully as an employee and build relationships with other team members.
Reward system - employees need to be provided with a reward system that is in line with the companies culture.
It is more important now than ever to establish a company culture using managerial tools like those outlined above that will drive employee's productivity and performance, which in turn will drive the organisations performance levels. If change within an organisation is to occur to enhance its effectiveness, then changes to the culture need to be made.
To achieve a company's strategic plan, a culture and framework that will support the goals and actions that will make it happen need to be developed, purposefully implemented and intentionally maintained. The recommended way of doing this, as outlined in this report, is to observe the organisations current culture, align its culture with the strategic plan, develop and follow a suitable framework and back this up with strong leadership, appropriate management tools and communication at all levels of the organisation.
In this way an organisations efficiency and effectiveness can be maximised through developing the organisational culture and ensuring alignment between its strategy and the way things are done within the organisation. Only after all this has been done can change begin. This then provides an ideal environment for all of the stakeholder's interests and needs to be met.