Organizations face huge pressures

Factors forcing Change

Organizations face huge pressures to change, from both internal and external sources, internal forces to change often as a result of long-term external forces. For example, Biggest Coal Mining companies internal pressure to expanding their activities to Coal mining and Energy plant Chemical industry, as a result of more and more other similar companies interested to engage with chemical industry.

Internal Factors forcing change

The factors internal to an organization that force changes can be identified through a formal analysis method. Most common among these methods is S.W.O.T. analysis.

Strengths

An organization’s strengths, which help identify a competitive advantage or unique selling point, are of vital importance when deciding on changing the focus of the company.

Weaknesses

An organization’s weaknesses are a real motivation to change. Weaknesses identified internally in a company’s product or service, will require immediate attention and changing. The weakness would be resolved by a cultural change.

Opportunities

Opportunities that present themselves, like new contracts on other continents will force changes in the company, sometimes as simple as new working hours. With the differences in different customer expectations, modern companies need to remain flexible. Flexibility is a major cultural change that needs to be introduced.

Threats

Threats to an organization, usually in the form of competitors and substitution products force a company to react. To react effectively companies have to react quickly, which is a cultural change in a company.

External Factors forcing change

The factors external to an organization that force changes can be identified through the PESTELI acronym.

Political

Political factors would include the current and potential influences from political pressures such as unions and national pay agreements.

Economic

The local, national and world economy impact can force an organization into changing their work practices or even product prices.

Social

Changes in lifestyle absolutely force changes in organizations, but at a cultural level, socially changing attitudes towards work or ethical issues can also have effects on the culture inside an organization.

Technical

The ever-changing technical world in which we live has probably the most profound effect on organizational culture of all external factors. Technical improvement that allow employees to work from home, working teams to be separated by great distances and for customers to be located on the opposite side of the world from their suppliers. Anything that changes the day-to-day work of the employees has a profound effect on the organizations culture.

Ecological

The local, national and world ecological and environmental issues that have effects on culture at national levels filter down into the organizational culture within a company.

Legislative

The legal issues both locally and at an EU level, such as taxes and working time regulations also have effects on culture at a national level, filter down into the organizational culture within a company.

Industry

Industry changes have a huge effect on national culture. The move away from agriculture into industrial and now information economies has greatly changed the national working culture.

WHAT IS ORGANIZATIONAL CULTURE?

Managers and employees do not perform their duties in a value-free vacuum, their work and the way it’s done are governed, directed and tempered by the organizations culture. Burnes, B. (2004) ‘Managing Change’. There are three main factors affecting the culture of an Organization,

These are:

1. The Founders basic assumptions
2. The national culture
3. The task in hand.

Gargan, D. (2005) ‘Change Management Lecture Notes’

The Founders basic assumptions

In a typical company the founders set up small and grow the company from one basic good idea. These founders go into business to make money, pure and simple. However, depending on the nature of their work certain assumptions made by the founders will immediately set the culture for the initial and all future employees.

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For example, “Energy resource” company’s founders found out powerful innovation Coal-to-liquid (CTL technology). This is going to be very huge project and founders working on it very precise. That’s why they push all employees, who will probably not be given too much freedom and all work would be carried out along strict guidelines and the basic idea of management not trusting staff may be in place. The Founders basic assumptions immediately set the working environment and culture within an organization.

The national culture

National attitudes to working determine the employee’s general attitude towards working. Now every employee is different, but when talking about culture at a national level there are some basic truths that always apply. Some national cultural behaviour will lead the company toward organizational change, while others will hamper it.

National Cultures that help change:

• Mongolian people leaving work place at 6pm on Friday to go to pub.

This helps change culture, Idea is it leads to more integrated working environment, where everyone ends up talking about work and discussing opportunities and threats.

• Society encouraging further education

National Cultures that hinder change:

• Japanese people not leaving the office until their boss has.

(Over tired and less productive staff)

• Lunchtime drinking culture
• Unions and their involvement
• National pay agreements

The task in hand

The task in hand it the major defining factor towards the culture of a company. If the company’s job is mainly customer service, meeting and dealing with people, then the organizations culture should be focused to customer. However, if the company is an innovator, its culture should be one of exploration and give more individual freedom to the employees. In this case we need look at how cultural change turn mining company employees into power plant industry employees. At different levels within an organization there are usually different tasks. For example, in “Chemical industry” company, there may have 3 distinct groups.

1) Research and Development

This group will have brain storming culture and scientific research for innovative technology.

2) Professional Services

This group works directly with customers, culture will be more customer focused as they are under more pressure.

3) Sales

The sales group will have a “Yes” culture, never turning down any opportunity, and putting pressure onto the other two groups to deliver.

Organizations structure effects on Culture

“Energy Resource” company organized with Matrix organization structure. Its resources are shunted around the organization to meet the demand for attention that tasks require. Employees work less in fixed groups for long periods and so no pockets of different cultures can grow, but rather if Employees are unhappy with their work, the chances are that they can be easily moved, so as to maintain good working culture.

Factors forcing Change

Organizations face huge pressures to change, from both internal and external sources, internal forces to change often as a result of long-term external forces. For example, Biggest Coal Mining companies internal pressure to expanding their activities to Coal mining and Energy plant Chemical industry, as a result of more and more other similar companies interested to engage with chemical industry.

Internal Factors forcing change

The factors internal to an organization that force changes can be identified through a formal analysis method. Most common among these methods is S.W.O.T. analysis.

Strengths

An organization’s strengths, which help identify a competitive advantage or unique selling point, are of vital importance when deciding on changing the focus of the company.

Weaknesses

An organization’s weaknesses are a real motivation to change. Weaknesses identified internally in a company’s product or service, will require immediate attention and changing. The weakness would be resolved by a cultural change.

Opportunities

Opportunities that present themselves, like new contracts on other continents will force changes in the company, sometimes as simple as new working hours. With the differences in different customer expectations, modern companies need to remain flexible. Flexibility is a major cultural change that needs to be introduced.

Threats

Threats to an organization, usually in the form of competitors and substitution products force a company to react. To react effectively companies have to react quickly, which is a cultural change in a company.

External Factors forcing change

The factors external to an organization that force changes can be identified through the PESTELI acronym.

Political

Political factors would include the current and potential influences from political pressures such as unions and national pay agreements.

Economic

The local, national and world economy impact can force an organization into changing their work practices or even product prices.

Social

Changes in lifestyle absolutely force changes in organizations, but at a cultural level, socially changing attitudes towards work or ethical issues can also have effects on the culture inside an organization.

Technical

The ever-changing technical world in which we live has probably the most profound effect on organizational culture of all external factors. Technical improvement that allow employees to work from home, working teams to be separated by great distances and for customers to be located on the opposite side of the world from their suppliers. Anything that changes the day-to-day work of the employees has a profound effect on the organizations culture.

Ecological

The local, national and world ecological and environmental issues that have effects on culture at national levels filter down into the organizational culture within a company.

Legislative

The legal issues both locally and at an EU level, such as taxes and working time regulations also have effects on culture at a national level, filter down into the organizational culture within a company.

Industry

Industry changes have a huge effect on national culture. The move away from agriculture into industrial and now information economies has greatly changed the national working culture.

WHO CAN CHANGE CULTURE?

Changing the culture of an organization is an extremely difficult task, but it may be necessary to get the results required. If an organization were thought of as a restaurant, and the employees as the waiters, content and well looked after waiters would go about their jobs in a pleasant manner and as a result tips would be high and the restaurant turnover would be high, as customers would enjoy eating there. However, on the other hand, if working at the restaurant was made difficult for the waiters, with an unpleasant working environment and impersonal culture, they might not go about their jobs with such enthusiasm, a lack of motivation would become obvious in their demeanour, tips would be low and restaurant business would suffer. So it’s in an organization’s best interests to maintain a healthy and productive working culture. Changing an organizations culture can be done at the three distinct levels with an organization:

Executive Management, Middle Management and regular employee level. Lets look at them in turn and consider two very different football clubs

(Manchester United and Arsenal) as differing organizations.

At an Executive Management level

Executive management are the group that direct the organizations goals. So, in

order for them to effect cultural changes, they may have to change the organisations

direction. The organisation may need to be streamlined in order to make provisions

for the desired changes. Inspiring and motivating staff through vision and mission

statements as well as overall policies would be a common approach taken at this level.

Changes introduced at the executive management level are the most difficult changes

to resist, because employees are largely powerless against them.

In the terms of the football clubs, the executive management would be the

boards of directors, who can release certain amounts of funding for the operation of

the team and/or make performance goals for league finishing positions.

At a Mid-Management level

Middle management is the level from which most organisational change

comes from. These changes can take the form of new operations rules (e.g. Forced

timesheet logging). Changing the working practice for employees, by making their

working life more strict or more lenient, pushing more responsibility onto the

individual employees or smaller changes like more frequent or earlier meetings.

However, changes enforced or imposed by the mid-management are the most resisted.

In the terms of the football clubs, the middle management would be the team

managers. The managers can effect change by shouting at players and demanding

results, as done by Alex Ferguson at Manchester United, or by talking through the

current issues are working for a solution together with the players, as done by Arsene

Wenger at Arsenal.

As a regular employee

Regular employees can change the culture in an organisation in the most

effective manner. Through an observed work ethic or levels of professionalism or

levels of “completeness” in their work, employees can pressure other employees to

change how they work and this will filter around the organisation, effecting the

change.

Now there are two types of motivation that people respond to. One, the people

who are shouted at and told what to do and told there will be consequences if they do

not perform. This was the kind of tactic employed by Roy Keane at Manchester

united. Two, the people who like to be told that they are doing a great job and

encouraged to do a little more, but encouraged by someone who was obviously

performing better. This was the kind of tactic employed by Patrick Viera at Arsenal.

Guidelines for changing culture (Burns 2004)

1) Formulate a clear strategic vision.

An organisation needs a clear vision with a well define strategy and values in

place in order to be effective.

2) Display top-management commitment.

Cultural change needs to be managed from the top down. Executive

management need to agree to the plan and stick to it.

3) Model culture change at the highest level.

Cultural changes need to be communicated through the actions of executive

management. Management need to lead by example.

4) Modify the organization to support organisational changes.

Cultural changes need to be reflected in organisational changes in order to

back them up, if at all possible.

5) Select and socialize newcomers and terminate deviants.

To really effectively change organisation culture, those who resist the change

may need to be let go. People stuck in their ways that cannot adapt are of no

benefit to the organisation going forward, sometimes this will manifest itself

in the form of early retirement. The hiring of new people will be done with the

new organisation culture in mind.

6) Develop ethical and legal sensitivity.

Changing a culture then radically changing all the staff in a company may not

only send out the wrong message, but actually be illegal or in breech of union

regulations. Such plans need to be enacted very carefully.

Conclusion

Culture is a complex beast, derived from the personalities of all the current

and previous employees of an organisation. As such, changing culture is equivalent to

changing peoples thinking, which is a non-trivial exercise. The intricacies of culture

and office politics are potentially huge and the initially obvious culture may just be

the tip of the iceberg as regards the culture at large.

The culture of an organisation does indeed determine its ability to change

effectively, but this is a good thing. For small innovative organisations, where the

company is based around a core nucleus of core staff, the attitudes and actions arising

from those people will define the culture, usually into a vibrant and dynamic

workplace, capable of changing quickly and often ahead of the times. On the other

hand, in mature hierarchical structured organisations that have a large amount of

management supported by a lower amount of staff, the culture will become more

complex. Large organisations that have this structure (e.g. Financial Institutions), take

time to change effectively, because not only does the structure of the company mean

that it will take time for the changes to be propagated around the organisations, but

the changes are more likely to be resisted at every level down the hierarchy from the

executive management to the “real” works, who the changes will most likely effect

the greatest