Business Essays | Organisational
Culture and Change
Culture within an organisational context
is a widely explored paradigm. It's nature and mottled definitions
have formed the basis of organisational study for many decades.
From Handy's cultural forms in the notorious "Gods of
Management"3, to the Morganest metaphoric representations
of the concept such as, culture as a web, an onion, or an
iceberg6.
Therefore, the contents of culture encompasses a
wide range of organisational phenomena including surface features
such as values and forms of expression: preconscious factors
such as symbols and norms: and deep structures such as basic
assumptions and worldviews (Pettigrew 1979; Frost et al 1985)7.
They all imply that culture is an integral part of organisations,
that without due consideration, development of strategy will
ultimately lead to failure, leading to the assumption that
culture should always fit with organisational strategy. Revenaugh2
suggests that most researchers assume that corporate culture
is an important consideration for understanding and effectively
managing organisations, and thus supports that argument.
Bringing
me to the purpose of this essay, which is to explore the context
of organisational culture in more depth and come to a more
discernable conclusion about its relationship with strategic
management.
As a result of its wide and varying definitions, corporate
culture can be hard to define, measure or manage; these definitions
reveal culture to be a complex concept that involves many
factors as suggested by numerous academics such as Pettigrew5.
Thompson and Strickland (1987) offer this explanation: "Every
organisation is a unique culture, it has its own special history
of how the organisation has been managed, its own set of ways
of approaching problems and conducting activities, its own
mix of managerial personalities and styles, its own established
patterns of "how we do things around here", its
own legendary set of war stories and heroes, its own experiences
of how changes have been instituted - in other words, its
own climate, folklore and organisation personality"2.
Naturally there are other definitions given but the basic
thinking of this concept in organisational terms is twofold.
As a component that represents the core of the organisation
and it's way of doing things or as its Achilles heel.
The first view sees culture in terms of encapsulating distinctive
competences8. The later though is often attributed to the
term "Icarus Paradox" (Miller 1990)6. Miller argues
that there is a tendency for organisations to become victims
of the very success of their past. Here arises the concept
of strategic drift, where an organisations response to the
changing environment is often within the parameters of the
organisations culture, which over time becomes more and more
apparent. In this respect culture is traditionally seen as
a preventative to change, which stifles innovation and results
in a momentum of strategy that can lead to strategic drift.
In short the organisations response to the business environment
is internally constructed rather than objectively understood.
This view therefore supports the assumption that strategic
change must always be accompanied by an appropriate cultural
change.
The opposite of strategic drift is strategic fit. This is
also known as the process of incremental development. Quinn
(1980) and Lindblom (1958)11 have argued that incremental
development in organisations is not only inevitable, but also
logical. Managers are aware that it is not possible to know
about all the influences that could affect the future of the
organisation.
So to cope with uncertainty, strategies must be developed
in stages, carrying members of the organisation with them.This
allows the organisation to try out new ideas and experiences
to see which are likely to be effective and to stimulate commitment
within the organisation through continual, but low scale change.
Mintzberg and Waters (1985)9, argue that building too much
upon what manager's espouse is precarious because whether
managers choose to follow the notion of logical incrementalism
or not is irrelevant, because it doesn't automatically follow
that they behave in such ways. This highlights the difference
between the intended strategy and the one actually being followed
- the realised strategy. This difference is often attributed
to some unseen internal power, which for the purpose of this
essay we will call culture.
The point is there has been a good deal of discussion in
recent years about the formulation and implementation of strategy.
Thus the argument I'm trying to represent here is that for
strategic change to be effective practitioners must bear in
mind cultural constraints. In other words, the proposition
that cultures should always fit with organisational strategy
is correct but only because it assumes that culture can be
measured and controlled. The rationalistic models (such as
logical incrementalism) that have dominated the complexity
we call scientific management, are only the tip of the iceberg,
and should only be seen as an integral part of a much wider
process, as there are other explanations that explicate how
managers cope with the complexity of managing change. Allaire
and Firsirotu (1984)1 for instance suggest that how the organisation
scans its environment is of major importance, that leadership,
decision-making style, and organisational design are of significance
to the process, but the argument put forward by Schein4 is
that the concept of organisational culture embraces all of
these variables, therefore organisational strategy is the
outcome of organisational culture, not the other way around.
If strategic change is viewed this way instead, what emerges
is that the complexity that manager's face cannot be objectively
analysed, because managers hold to a set of core beliefs and
assumptions. There is also likely to exist at some level a
core set of beliefs and assumptions held relatively common
by managers, either called "ideational cultures"
or "myths" (Hedberg and Jonsson, 1977)7. Either
way this set of beliefs, embraces assumptions about the nature
of the organisational environment, the nature of its leaders,
and the operational routines seen as important to ensure the
success of the given organisation. All these assumptions lead
to the conclusion that whilst it would be necessary to modify
corporate culture to ensure effective strategic change as
the proposition suggests, given the nature of cultural paradigm
it's not always possible to adhere to that rule.
I'd suggest that an organisations culture is far more easily
perceived to those from outside the organisation. An example
of this type of action can be associated with Compaq Computers,
who during the 1990's bought in a new CEO (Eckhard Pfeiffer),
who within a year had a new strategy in place involving the
complete overhaul of the company. Pfeiffer said: "We
had to recognise what had gone wrong and name the problems
early. Only by asking for dramatic change can people see their
way out of old habits. Sometimes it is more difficult to achieve
a 10% cost reduction than it is to tell people they have to
achieve 50%. Small incremental steps block your view of doing
something fundamentally different"12. The success of
this strategy contradicts the beliefs of Quinn (1980) and
Lindblom (1958)11 whose views on the value of logical incrementalism
are highly regarded and instead offers support for the work
of Mintzberg and Waters (1985)9.
Alternatively there is the view that when organisations have
a strongly shared vision or culture it is often easier for
organisations to get things done more effectively (because
it captures distinctive competences). If people share a common
set of goals, a common perspective and vocabulary on what
to do and how to accomplish it, it allows them to coordinate
their behaviour more effectively. Managing through shared
vision and with a strong organisational culture has been a
very popular prescription for organisations (Deal and Kennedy,
1982, Peters and Waterman 1982, Davies 1984)7, and is also
supported by the actions of Pfeiffer who also wanted to preserve
Compaq's culture, which stood for quality, service and innovation.
"I was 100% for culture. Let us keep the culture but
let us solve our problems"12. This view suggests that
it is not always necessary to change the organisations culture
in order to achieve an appropriate strategic change, that
the proposition being discussed is inaccurate and only represents
one side of the argument.
The work of Gagliardi4 suitably sums up all of the assumptions
and contradictions discussed during this essay. Starting with
Schein's view that values and assumptions are at the core
of an organisations culture and adding that every organisations
primary strategy is to protect the organisations identity
rooted in those assumptions and values. He then discussed
the possibility that there are a number of secondary strategies
that are developed and implemented which bare in mind the
primary strategy. These strategies may be directed towards
the internal or external environment and are either instrumental
(management of external problems of adaptation and internal
problems of integration) or expressive (seek to protect the
stability and coherence of shared meanings). In developing
this concept Gagliardi traced three types of change, which
arguably have formed the main threads of this essay.
Firstly there is apparent change, which is where new problems
are confronted by choosing from a range of different options
permitted by the company culture. Secondary strategies only
produce changes at a superficial level, as the organisation
only adapts within the confines of its existing identity,
similar to the process of logical incrementalism. Secondly
Gagliardi proposes the concept of Cultural Incrementalism
where a strategy stretches the existing organisational culture
to include new values alongside its old ones. This is very
much the approach taken by Pfeiffer in the overhaul of Compaq.
Finally there is revolutionary change; Gagliardi argues this
is where strategic change is imposed upon the organisation,
which does not comply with existing cultural values and believes,
and requires the organisation to create new values and symbols
in order to achieve the desired change. In this case it is
more appropriate to say that "the old firm dies and a
new firm, which has little in common with the first, is born".
In other words strategic change doesn't always fit with the
organisations culture.
At one end of the scale exists that strategy which when aligned
with the organisational values, does not require an appropriate
cultural change. On the other hand when strategies are in
conflict with assumptions and values, culture is either overthrown
where it is then replaced or destroyed, or the strategy is
resisted and never implemented. Somewhere in between those
two extremes exists a middle ground or a compromise where
strategies are different but not incompatible with assumptions
and values, and it is only necessary to expand the existing
culture so that it incorporates some new assumptions and values.
In conclusion, Gagliardi's model separated culture and strategy,
by suggesting that different strategic moves have different
effects on an organisations culture and the examples I have
illustrated throughout this essay would seem to agree with
that assertion. That whilst the proposition being analysed
is partly correct, in light of the findings of this essay
I offer a more discernable explanation, "Organisational
cultures sometimes fit with organisational strategy, but it
isn't always appropriate to fit the culture with the strategy
and visa versa" and to quote Strebel (1996)10 "successful
change takes place on a path that is appropriate to the right
situation" and of which accordingly makes my point.
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