Cultural Evaluation to Develop Business

INTRODUCTION

Based on an in-depth overview of the case study, this essay critically analyses and underpins the Smartbuild case and further evaluates other aspects of the management principles such teamwork and organisational culture and suggests changes required to develop the business. Cultural evaluation tools and typologies are discussed to evaluate Smartbuild’s existing culture and climate. Moreover changes are proposed which are likely to affect the progress of the business and the extent to which they are likely to affect the desired organizational culture and climate.

THE CURRENT STATE

The current state of the company is quite different than what it previously was, Mr A. Bloggs appointed his son, Mr B. Bloggs, to be the managing director upon his retirement. This meant that Mr A. Bloggs was stepping down as the leader of the organisation and handed it over to Mr B. Bloggs, which was then definitely going to bring about changes in the organisation. This situation directly impacted the company as a whole. Smartbuild Construction Ltd. is exposed to danger and obviously unable to deliver. They are particularly concerned that they will not have adequate new work to survive the likely decline in their local markets if they fail to deliver on their TiesRus contract. They also acknowledge that the company is poorly positioned to survive and grow, both structurally and culturally.

CULTURAL UNDERSTANDING

Culture is often said “to eat strategy for breakfast” (Drucker, 2006) the implication that, regardless of how good a strategy is, unless specific initiatives are concentrated on changing people’s attitudes, behaviours and work practices, the strategy will fail. Understanding culture of an organisation can be quite the task especially in large companies with a number of employees and staff being very diverse culturally. With the help of Cultural Models, understanding the cultural situation becomes easier. This discussion will go through some of the existing Cultural Models and will adopt the best suitable for the Smartbuild organisation. 

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Edgar Schein’s Model

Edgar Schein’s model is one such which helps interpret what the cultural position is within the firm. To Schein, culture is dynamic and multi-faceted; it cannot be easily judged as good/bad, strong/weak, or effective/ineffective. Culture is contextual and lives within us as individuals as well as within groups of people. (Cotter-Lockard, 2016). Edgar Schein believed that as employees go through various changes and adapt to the external environment and solve organizational problems, organizations take time to develop a culture. They learn from their past experiences and start implementing practices, and the attitudes of employees form the culture within the organization collectively. Schein believed an organization culture has three levels and a culture assessment method.

However, in an organization, once Schein’s model’s advantages have turned into deficiencies, due to the temporary feature, the evolution mechanism of Schein model is annulled with partly function on managed changes. Because of the lack of genetic classification, there can be no straightforward comparison between organizations. (Yang, 2016) Therefore, it can be said that in a particular organisation, the Schein model can assist an organisation evaluate cultural shift efficiently. It should merge other analytical models or concepts in the event of a particular organisation, based on the specific features of those organisations.

Hofstede’s Model

Next we have is the Hofstede’s model, Psychologist Dr Geert Hofstede published his cultural dimensions model at the end of the 1970s, based on a decade of research. Since then, it’s become an internationally recognized standard for understanding cultural differences. Hofstede studied people who worked for IBM in more than 50 countries. (Hofstede and Hofstede, 2005)  Initially, he identified four dimensions that could distinguish one culture from another. Later, he added fifth and sixth dimensions, in cooperation with Drs Michael H. Bond and Michael Minkov. These are: Power Distance Index Individualism Versus Collectivism, Masculinity Versus Femininity, Uncertainty Avoidance Index, Long- Versus Short-Term Orientation and Indulgence Versus Restraint.

The research by Hofstede implies that the country’s national population is a homogenous whole. However, most nations are a heterogeneous collage of different societies. His research focuses exclusively on countries as analytical units of society. However, research discovers that culture is actually divided across community and domestic lines (DiMaggio, 1997) and often overlaps across domestic borders. His study is also overwhelmingly western-centred and mainly disregarding alternative frameworks.

Schwartz’s Model

The theory identifies ten fundamental personal values recognized throughout cultures and explains where they come from. The concept that values create a circular framework reflecting the motivations expressed by each item is at the core of the hypothesis. This circular design is obviously culturally universal, capturing disputes and alignment between the ten principles. (Schwartz, 2012)

The results from this theory confirm the importance of work and organizational values for relevant individual outcome variables. However the aggregation of scores of organizational values to determine additional objective gives an underestimation of the true importance of organizational values, especially for attitudinal outcomes. (De Clercq, 2007) The first limitation of this study might be that common variance in methods inflates the correlations between work values, organizational values, and results.  This study’s second limitation is that the data was cross-sectional.

Charles Handy’s Model

The method of viewing culture by Charles Handy led researchers to use it to link organizational structure with culture. Handy identified four different types of cultures: ‘ Power Culture, ” Role Culture, ” Task Culture, ‘ and ‘ Person Culture’. According to Handy, Power Culture can be symbolised as a ‘web’ and it refers to control that is spread out like a network from the centre to the rest of the organisation (Handy, 1993)

There are also constraints to Handy’s strategy. There is an inclination to accept Handy’s four cultures as settled or’ granted’ styles— something an organisation has, rather than something that has been developed, negotiated and distributed by everyone engaged in the organisation and that can develop over moment. None of the four types can claim to be better or superior; each is appropriate for various kinds of conditions. Most real-life organisations tend to contain a combination of cultures and from Handy’s point of perspective, each is appropriate for distinct kinds of situations, including distinct personality kinds.

Johnson and Scholes’s Model – The Cultural Web

The Cultural Web is a tool to explore the existing culture of an organization and to define the desired culture. It can be used to understand domineering factors in the present culture, to analyze what culture is needed to deliver a strategy, and to understand the differences. (Johnson and Scholes, 1995) Fig1 is a model of the culture web, centred at the Paradigm and the different petals around it. Basically, the Cultural Web helps management to focus on key factors of the culture and their impact on strategic issues and can identify blockages to and facilitators of change in order to improve performance and competitive advantage.

A thorough evaluation of organizational culture is the cultural web model but it also has some constraints. Different people have different cultural views. Therefore, if conducted only by few managers or individuals, the evaluation may not be objective. (Wu, 2015) Since the brief does not address the cultural perspective of individually but as an organization, this model is the right fit.

The Cultural Web recognises six interrelated elements that help make up what Johnson and Scholes call the work environment’s “paradigm”–the pattern or model. You can start to see the larger image of your society by evaluating the variables in each: what works, what does not work, and what needs to be altered. The Web can be of two types, one which represents the state of the organisation and the other is what it aspires to be. To explore on what Smartbuild aspires to be we must first understand and evaluate what it is currently.

Firstly in Stories, they have to do with successes, failures, leaders, villains. Members of a company tell each other and third parties externally. Stories are an important element in determining what an organization considers to be important (Brusati , 2013). The past and present events and people talked about inside and outside the company. Stories tell us what the scene is at the organisation, what is happening. Smartbuild is facing an extraordinary amount of problems since the retirement of the company’s backbone Mr A. Bloggs. Internally the company’s new appointed leaders are looked upon as the villains who are unworthy to carry forward Mr A.’s legacy and are the reason for the impending doom of the organisation because they are incapable of restoring stability to the company.

The main problem is the TiesRus situation; the company is concerned at how they will deliver the five-year framework contract with the necktie retail chain TiesRus. Furthermore, the board members are concerned that the company will not be able to cope with its ambitious expansion plans given their current operating policies and structure. Despite the recession, they became increasingly concerned about the number of employees leaving the organization since the retirement of Mr A. Bloggs and it is now challenging for the company to fill vacancies with suitable people. The rocketing recruitment and wage budget, coupled with hardships in maintaining its local market position, reduces margins to such a degree that the company makes little profit that it can reinvest in the company. In addition, the productivity and performance of those with the company deteriorates to the extent that many projects run over budget and program.

Symbols, this is the visual representation of the company; how they appear to both employees and individuals on the outside. Particular people may come to represent especially important aspects of an organisation or historic turning points. (Johnson and Scholes, 1995) Symbol can be something that represents the company. The main symbol of the Smartbuild was Mr A Bloggs himself and his legacy. He was like an inspiration to everyone at the firm, with his skill sets and his self-built large network of people, he had become the backbone to the organisation. Currently this symbol is no more, as of the day Mr A announced his retirement. This turn of events has deeply affected the company and losing the core of the organisation is leading to its demise.

Symbols can also mean something the organisation holds which symbolises the company’s beliefs and nature. It can be company logos, reserved parking or management suites, something the organisation is known for. The only other symbol Smartbuild holds is that the organisation currently has no formal performance assessment system, but it is expected that department heads and site managers will recommend bonus payments to staff. All managers and office managers have company cars and private healthcare systems membership. An income-related annual bonus system operates for managers, site management teams and joinery and residential business managers. There is also formal training and development plan. Although the company has traditionally taken on one trade apprentice per year, in recent years they have tended to lose their apprenticeships on qualification with other companies and have therefore not recruited trainees in recent years.

Power-structures, they influence the core assumptions within organisations. Usually are the most powerful groupings in a company that are associated with the core beliefs (Brusati , 2013). The current power of the organisation is on a complete bureaucratic approach facilitated by the three Managing Directors. Mr B. Bloggs one of the newly appointed Director knew he had huge responsibilities on his shoulder and had to manage the company and win the employees’ hearts, but he had little to no personal network in the company to do so.

Organisational Structures, this refers to both the hierarchy and structure designated by the organisation. Alongside this, Johnson and Scholes (1995) also use it to refer to the unwritten power and influence that some members may exert, which also indicate whose contributions to the organisation are most valued by those above them. In his retirement, Mr A. Bloggs appointed his son, Mr B. Bloggs, as managing director. This meant that Mr. A. Bloggs stepped down as the organization’s leader and handed it over to Mr. B. Bloggs and assigned two other Managing directors to create hierarchical structure which the company did not have before.This created a stable top division to comfortably control all the different aspects of the company. By establishing this hierarchical structure, a complete bureaucratic system was created. The system followed all of Weber’s principles of bureaucracy— a formal system of organization and administration designed to ensure efficiency and effectiveness (Mahfooz 2016).The term ‘bureaucracy’ has been widely used with invidious connotations directed at government and business. Bureaucracy is an administrative system designed to accomplish large-scale administrative tasks by systematically coordinating the work of many individuals. (Microsoft Encarta, 2009) This brought about a rigid system in the top division with powers distributed unwontedly to three individuals rather than a group of people on different sectors. Furthermore since there was little to no personal network, this had an immediate impact on the Human resource management because previously Mr. A. Bloggs recruited all of his staff through his personal network of regional contacts in the past.

Control systems, these are the systems and pathways by which the organisation is controlled. This can refer to many things, including financial management, individual performance-based rewards (both measurement and distribution) and quality-control structures (Brusati , 2013). Similarly to as one of the symbols, all wages and bonus payments shall be at the Managing Director’s discretion. All managers and admin staff have business cars and private healthcare schemes membership. A profit-related annual bonus scheme operates for managers, site management teams, and joinery and residential business managers. There is no HRM manager and therefore all HR operations are monitored by line executives under the management’s general control. Fig 2 represents the role of the HRM manager. He does not only  increase awareness of the cultural phenomena within the organisation but also identifies some of the behaviours that are present and question why these behaviours manifest and the consequences of such behaviour on organisational effectiveness.

And finally the Routine behaviours, those behaviours are performed by the members of an organisation when carrying out their activities. They are visible both internally and externally. It can be very challenging to modify such behaviours. Rituals are activities and events that highlight what is important in a particular organisation and they reinforce the culture of an organisation (Brusati , 2013). During Mr. A.’s reign, all the staff members and employees were quite happy and satisfied with the company and its system and the continued prosperity of the company exhibited this. But right after his retirement, there was a sudden change in the company’s spirit. This was because the people could not comprehend someone else replace the symbol of the organisation and continue Mr. A’s legacy. The company had a ritual of having informal recruitments by Mr A. Bloggs himself who recruited all of his staff through his personal network of contacts around the region.  Currently recruitment is managed by the three directors and is wholly based on responses to job advertisements in local papers and formal interviews as well as all the salaries and bonus payments are at the discretion of the Managing Director.

Now since it’s clear what the current Web looks like, what Smartbuild aspires to be is quite simple. In Stories, building a better community in the organisation where employees don’t have to be afraid of the company’s position and the future of the firm looking to go uphill by successfully acquiring and executing the TiesRus project and further negotiating other projects. The company should ensure unity among its employees enforcing teamwork and leadership to create a stability and stronger network within the firm. It takes time to form a team, and members often go through recognizable stages as they move from being a collection of strangers to a united group with shared goals. These stages are described in Tuckman’s (1965) Forming, Storming, Norming, and Performing model. You can help your new team to become more effective faster when finally you understand it. The company logo should symbolise unity reminding everyone to stay together to succeed together. The Power structure needs to change, the new directors should step down and emergent leaders need to rise or voted to be the new face of the company, someone who people can trust to continue Mr A.’s legacy. The Organisational structure should be made in such a way that it does not represent the past or the present, even though the past was very successful, having the main man step down when time comes it is going to destroy the firm again. So, having a well organised structure with more leaders on top of their respective departments will create stabilization. The leaders should be emergent or voted to represent the department, sharing equal power with the other leaders. As for as Control System, designate a more human-related resource manager and have him as a ‘ manager of human relationships,’ but still play the role of a human resource manager. This is because during this expansion the firm needs a human resource manager to create a strong structure, but at the same time it needs to give an image that prioritizes the approach to human relationships, this is what is known as a white lie, something which sounds unethical but is used in a lot of organisations. Bringing back a company which is poorly positioned, both structurally and culturally is quite the task but a solid human resource management will bring in enthusiastic and hardworking young individuals who will be willing to get the company running again. The team role model made popular by Meredith Belbin in relation to management teams (Belbin, 1981, 1993a) is used on an international scale and it’s very useful for managers, consultants and trainers engaged in team building processes. Fig 3 represents all the different roles in a team.  For most organisations, effective teamwork has become a fundamental issue. While many variables affect the efficiency of a squad, significant attention has been paid in terms of positions performed in a team to the impact of team member diversity. Using this model to create opportunities for individuals to understand what they are capable of doing in the team and identifying their role will be very effective in getting a task done.  Having these goals on the petals of the web will only bring success to its Paradigm.

Conclusion

Based on these evaluations, it is quite conclusive that the culture of the organisation will need to undergo changes to what it is now, to bring about success in the firm. The culture the company had developed in the past was very successful and the core of the original corporate culture should be maintained, but it is natural that the culture would need to change to an extent in order that it does not lead to the same demise. Having a well levelled power-sharing top division by leaders who are well deserved would definitely guide the company back to full stability. An HRM manager is to be appointed to recruit quality personal for each department and should also ensure every employee is happy with their roles and the atmosphere in the work place is jubilant and productive.

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