The Social Glue Through Organisational Culture Commerce Essay

Organizational Culture is defined as the social glue holding the company together. Social scientists call it culture or the underlying set of informal norms and values that govern employee behaviour. But regardless of the name, more and more evidence suggest that “it” is important, often critically so (Baker, 1980) pg51. Culture consists of three layers values, beliefs and taken for granted assumptions.

Many authors still argue over the meaning of organizational culture, authors like (Sirmon & Lane, Jul. 2004, p. 310) consider culture to be set beforehand and it dictates the attitudes and behaviours for the organization’s members to exhibit, while some authors like Edward schein explain culture as “a common insight held by the organization’s members; a system of shared meaning” and naturally if authors have different opinions on the definition then they will also argue whether culture can be managed, manipulated or cannot be consciously changed. This essay is targeted to understand culture and culture change better.

Culture and Change

Culture can be both weak and strong; It is usually decided by the top management and sets the tone of the entire organization. “A weak culture can be of a young company or if the turnover of key personnel is high. (Baker, 1980, p. 51) “. A strong culture can be seen in efficient organizations with positive employee behaviour, with minimal information transmitted in any transaction and the working pattern has a flow, “a good culture can also be measured (Deal and Kennedy (1982: 15) cited by (Banish & Nawaz, 2003).”

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I feel culture can change the face of an organization, from world leaders to mere survivors. As stated by (Schein, Feburary 1983, p. 14) “Culture serves the function of stabilizing the external and internal environment for an organization, it must be taught to new members.” If it’s not carried forward, the new ideas from new members will produce a culture change.

To consider a change in culture, if possible, it’s not as simple as it sounds. Louis V. Gerstner (2002) the CEO for IBM states in (Banish & Nawaz, 2003, p. 22) you can’t simply give a couple of speeches or write a credo for the company and declare that the new culture has taken hold; you have to create the conditions for transformation, provide incentives and define marketplace realities and goals. In the end management doesn’t change culture; management invites the workforce itself to change the culture.

The three subdivisions discussed in Managing Organizational Culture by (Ogbonna & Harris, 1998) are:

(i) Studies which argue that culture can be managed.

(ii) Research which claims that culture may be manipulated.

 (iii) Theory which argues that culture cannot be consciously changed (although natural change is argued to occur frequently).

All three seem to be valid and vary from organization to organization. If an Organization has a stable environment then the present culture is perfect, but external conditions can bring the organization to its knees and force it to change its culture.

McKinsey’s well known 7-s framework places culture (mentioned as shared values) into a “happy atom” mentioned by Peter and Waterman (1982) cited in (Banish & Nawaz, 2003) pg 11, this model assumes that effectiveness of the culture of the organization: depends on 2 factors. 1st How strong the culture is, and 2nd how well culture is aligned with the other organs of the “body” (so called strategy-culture fit)

Sub-division – Present and Compare

The 1st subdivision explains how theorists believe that culture is an organizational variable and can be managed.

This article by (Harris & Ogbonna, Vol. 27 No. 2,1998, p. 119)researched with retail organizations to understand culture better, the findings were Cultural deviation was considered unwelcome whereas cultural change was viewed as transformational rather than incremental. Managers viewed culture of the organization as a variable which could be managed, and these assumptions allowed the managers to relate organizational culture to organizational effectiveness.

(Baker, 1980, p. 54) has provided some evidence that Culture can be managed, He starts the article by saying that manageable culture has a major contribution to a company’s success for instance, International Business Machines (IBM) has been successful to actively cultivate and manage culture; he/she also states that the culture is largely responsible for its success for the past 30 years IBM real issue is discussed later in the essay, many other organizations tried to manage culture, (change strategy or business environment) and failed. Some culture clash problems range from diversification (AT&T) to acquisition failures (Kennecott), but these are rarely fatal.

The author belief in managing culture is supported by the statement that “CEO and/or other top managers seem to recognize intuitively what culture they want and need; they create and maintain it by monitoring the existing culture and actively intervening where possible to reduce the gap between the desired and existing cultures.” All this has been confirmed by (Schein, Feburary 1983) below, He states managing culture is possible when an understanding for dynamic evolutionary forces which govern how culture grows and changes is achieved.

Author (Schein, Feburary 1983) cites (Van Maanen & Schein, 1979) writing the passing on of the group’s culture is strategically an important process to study If one wants to decipher what the culture is and how it might change” He believes that Culture can be managed and as stated earlier, it should be taught to the new employees in order to avoid any cultural change.

(Schein, Feburary 1983) states that managing culture till the end is not about controlling its member’s perceptions, thoughts and feelings but as the process of learning to manage the external and internal environment progresses the culture will get older which would influence our perceptions, thoughts, and feelings, but this all seemed valid until (Schumann & Prestwood, 1994) below gave their argument.

This article by (Schumann & Prestwood, 1994, p. 1) is a brilliant piece of work supporting the argument that culture may be manipulated and explaining ” how it’s done “. It states that an organization’s culture is the ultimate governor of the amount and type of innovation that will take place. The organization therefore must have a way to link its culture to its market. Innovation and change go hand in hand.

To compare managing culture and manipulating culture, author (Schumann & Prestwood, 1994, p. 3) citing (T. J. Watson, Jr. observed in A Business and Its Beliefs) gives an idea for what happened to organizations that tried to manage culture stating, Out of the top 25 industrial corporations in the United States in 1900, only 2 remain in the selected company today, One retains its original identity; the other is a merger of seven corporations on that final list. Two of those 25 failed. Three others merged and dropped behind. The remaining 12 have continued in business, but each has fallen substantially in its standing. The challenge for organizations today is the transformation of its culture so that organization can endure and grow though current revolution.

The author gives an extension of the IBM example above; stating IBM survived the past due to a very successful business model but as the environment shifted, it failed; now IBM is developing a new business model to survive with the top leaders, its fate is discusses later in this subdivision.

The only way to change quickly an organization must meet the customer demands, stay technologically competent, effectively deal with competition and respond to the pressures of change both from within and without.

This Figure 8 below from (Schumann & Prestwood, 1994, p. 10) explains how the existence of a strong organizational culture ensures the resistance of the organization to change.

The authors’ argument is completed with a point that culture must have built into a flexible methodology for change, comprising of components like: A clear and compelling vision, strategic planning for the operation, technology and people, integrative management approaches etc. For those cases where change was not anticipated, a strong but flexible culture will enable a rapid response.

(Cameron & Quinn, 1999, p. 6) Have also written an exceptional piece of work, their book gives a wide view of how the current literature claims an organization works and how it actually works. Author supports the view point “culture can be manipulated”. Since its long term, a strategy must be developed for changing it.

The article claims that between managing and manipulating culture “culture can be managed point of view” always leads to the downfall of a company. Out of the largest 100 Companies in the 1900s only 16 are still in existence. Of the firms on Fortune Magazine’s first list of 500 biggest companies, only 29 firms would still be included. During the last decade, 46 percent of Fortune 500 dropped off the list.

Author writes that “A musical greeting card that plays “Happy Birthday” has more computer power than existed in the entire world before 1950. The average watch contains more computing power than existed in the entire world before 1960.” Such rapid and dramatic change implies that no organization can remain the same for long and survive. Top companies on the Fortune Magazine failed due to slow, laggard or wrongheaded change efforts.

The companies in 1991 spent more money on computing and communications gear than the combined monies spent on industrial, farm, construction equipment etc

“And in the 1960s, approximately half of the workers in industrialized countries were involved in making things, by the year 2000, it is estimated that no developed country will have more than one eighth of its workforce in the traditional roles of making and moving goods.” (Cameron & Quinn, 1999, p. 6)

Culture looks like its thought of as “how things are done around here” sometimes it remains undetectable as employees don’t realise this practise. The current challenge for an organization is not to determine whether or not to change, but how to change in order to increase organizational effectiveness.

(Banish & Nawaz, 2003, p. 19) have given further explanation on the IBM issue, during the Great Depression of the 1930s IBM survived the impact and grew as it received a steady income from the business machinery that was leased or rented, at the same time CEO Thomas J. Watson, Jr. (1990) started benefits and vacations for his employees that paid off in 1936 when they started supplying to the US government. IBM remained successful as employees didn’t stay at the organization for employment but for security and way of life. IBM was successful in managing its culture until 1980’s but a cultural change was desperately needed.

In the 1980s IBM got a culture change. Louis V. Gerstner (2002) was appointed the new CEO in 1993 to manipulate change and he states (Banish & Nawaz, 2003) “Culture isn’t just one aspect of the game – it is the game”

Gerstner’s states Management doesn’t change culture, management invites the workforce itself to change the culture.

(Cummings & Worley, 2009, p. 522) gives some example. Company with a difficult but successful culture change can be Alberto Culver (Manufacturing Skin and Hair Products) where process took 6 to 15 years, in some cases managing culture isn’t the answer changing “it” is, for example the Disney case; when they tried to export the same culture to euro Disney, the European people preferred to drink wine with their meal and Disney’s not serving alcohol policy resulted in low attendance for both labour and customers. Four seasons’ hotel and resort were on the same track but were successful as they just changed their norms, procedures and artefacts to fit with the French culture and keeping their core values same. Managing culture and manipulating culture (despite its drawbacks) are often the only 2 options considered in an organization even by many theorists. The third subdivision below isn’t even mentioned as an option to consider.

Finally the third sub-division that claims that culture cannot be consciously changed seems a little untrue but well supported, very little information is available for this subdivision According (Ogbonna & Harris, 1998, p. 274) this subdivision argues that whilst the culture of organization can and does change, the direction, impact and sustainability of the change cannot be subject to the conscious action of management. (Senior & Swailes, 2010) claims that this presents problems for change agents who will perhaps need some external and perhaps unpredictable forces to make it happen.

Author (Meek, 1988) writes, what “culture cannot be consciously changed” actually means, he/she states that Social theorists use the term ‘culture’ to embrace all that is human within the organization. They emphasize culture, either consciously or unconsciously, in such a way as to blur or hide problems and contradictions inherent in the social structure. Both culture and social structure are abstractions, not tangible entities.

The author firmly sticks to the argument that culture cannot be consciously changed and writes that culture can be managed or changed views seem valid because many discipline copy concepts from another discipline which results in concepts becoming a stereotype. Author (Turner 1986) cited by (Meek, 1988) gives the idea that culture is the collectible consciousness of the organization, ‘owned’ by the management and available to management for manipulation; this is also thought by many authors. Author (Meek, 1988) contradicts this stating that concepts have been copied (as stated above) and theories of organizational culture have their roots in structural-functionalism, but they have been ‘mutated; in the process of application.

“Culture as a whole cannot be manipulated, turned on and off, although it needs to be recognized that some are in a better position than others to attempt to intentionally influence aspects of it” (Meek, 1988). To compare this with the other 2 subdivisions, it seems a little true, but culture may be manipulated subdivision has provided some evidence of such effect.

Conclusion

To conclude organizations fate depends on the culture, weak or strong and all three subdivisions have been justified beautifully by various author. Managing culture seems genuine with many theorists providing theory on how to avoid any cultural change but 2nd subdivision as the name suggests “Research” which claims that culture may be manipulated has provided evidence of organizations on how manipulating culture is the only way to survive, the 3rd subdivision seems to be a third side to a two sided coin, where authors explain how various authors have copied and altered studies. All together this essay gives a great idea about culture and its change subdivisions. I personally feel that manipulating culture is the way to go, can managers change an organizations culture? Yes for instance the Euro Disney and Four seasons hotel case and also with the technological advancements and pressure of external factors, no organization can stay the same and survive. Overall this essay comprising of small parts has shown a big picture about cultural change.