Concepts of Organisational Culture

Concepts of Organisational Culture What is organisational culture? Organisational culture is often referred to as something which tells us more about the organisation. This something may be the personality, philosophy, ideology or even the overall climate of the organisation. Organisational Culture is therefore an element which differentiates each organisation from the other and gives it a unique identity (Buchanan and Huczynski, 2004). The managerial writers vs. the academic social scientists The debate arises when theorists try to define culture. The management academics and consultants perceive this culture as a collection of values and beliefs, myths, symbols, heroes and symbols that possess a uniform meaning for all the employees. Whereas, the academic social scientists see it as a subjective reality of values and beliefs, artefacts, myths, symbols etc. They believe that organisational culture is formed through the social interactions of the organisations members and hence it is produced and reproduced continuously (Buchanan and Huczynski, 2004). This essay takes up both these contrasting perspectives separately in the light of various theoretical models and the examples of real life organisations. Organisational culture: following or adopting? The Managerial writers such as ouchi,1981; Deal and Kennedy,1982; Pascale and Athos,1982; Peters and Waterman,1982 and Schien,1985; believe that culture being an attribute of the organisation is given to its members who do not participate in its formation and accept or tolerate it as the organisation has it (Buchanan and Huczynski, 2004). Thus it is a collection of some basic assumptions that all organisational employees share and hence if these assumptions are changed, the culture will automatically be changed (Schien, 1985 Cited in Buchanan and Huczynski, 2004). Schien (1983) in his three levels of culture points out one of the sources of organisational values as those values which were the idea of a single person (founder) and are later modified by the companys current senior management. In contrast, Buchanan and Huczynski (2004) argue that if such is the case then these values may not be adopted by employees but only followed by them. And if senior management are the source of creating organisational values then these value may cause chaos when mergers and acquisitions take place. Then it will be a question of which of the older companies value will be followed in the newly formed organisation. Organisational culture as a means of unification and control The managerial writers suggest that if the basic assumptions are integrated amongst members and the organisation has a unified culture, then employee control will be possible and this will lead to greater productivity and profitability (Buchanan and Huczynski, 2004). On the other hand, the academic social scientists argue that a unified culture is never possible as organisational culture is pluralistic in nature due to the different subcultures present in every organisation. (Buchanan and Huczynski, 2004). Where managerial writer talk about extending the same unified culture to all the employees Brown (1995) argues and states the following facts that influence culture: Even if the employees are enthusiastic and intrinsically motivated as suggested by McGregors theory Y, most of them only give a fraction of their time to the organisation. They are members of other variety of clubs, societies and unions and hence they may not accept the culture whole heartedly and without any question since their demands and constraints are also influenced by these other bodies Part time or temporary workers are less likely to adopt the culture and some of them are actually working part time to avoid cultural control systems. Large numbers of people perform relatively unrewarding and undemanding jobs just for the sake of the financial reward. These workers may be only loosely attached to the organisation and may even go against a dominant culture in the organisation Contractual workers who are hired by organisations are actually members of separate organisations and it will be extremely difficult to make them feel part of the organisation. Therefore, the changing patterns of employment and organisational forms are actually impacting many of the very strict and cohesive cultures. The managerial writers believe in symbolic management of employees i.e. the use of organisational culture and selectively applying rites, ceremonials, myths, stories and legends to direct the behaviour of employees. The academic social scientists argue that since people enter organisations with different expectations, experiences, values, beliefs and motivations hence these factors also influence their behaviour in different directions In the practical world, we see companies using both these ideas, some try to reconsider their values and beliefs; and under the banner of changing culture try to come up and introduce new values and beliefs. It is argued that such attempts at changing culture may change behaviour of employees but not their deep rooted value and beliefs which do eventually have an impact on some of their behaviours (Thompson and Findlay, 1999). A simple example would be of the recent importance to corporate social responsibility. In such a case an employee may differ on his value and belief for a certain ethical issue, say the employee may not believe in child labour but what will he/she do when the company may have to outsource its manufacturing to a third world country (where majority of children are used as cheap labour) in order to cut down cost. Here, the employee may be convinced to change his behaviour and he/she may do so to save their job but at the end of the day their value and believe rema ins unchanged. On the other hand, some companies increase their employee interactions in a way that changes employee behaviour automatically. An example would be of an organisation that increases employee interactions with the customers and through this the employees are better aware of what behaviours please the customers. The changing nature of culture Another argument against the managerial writers would be that since they see organisational culture as something that has been pre determined and cannot be changed, how would they take into account the several changing factors that influence culture generally. An organisations culture may be influenced by its history, primary function and technology, its customers, its goals and objectives, size, location, top executives, strategy, structure and its environment (Mullins, 2007). The argument therefore is what happens to the culture when either of these factors changes. What will happen if there is new top executive in the company who may modify the founders ideas as per his values and beliefs? What happens if the organisation steps into a dynamic industry and requires a new structure and strategy, will its culture not automatically change or will the whole process of laying down new basic assumptions (values, beliefs, myths, stories and artefacts) will have to be put into action to ma ke the culture change? What happens if an organisation makes an international move and faces a new national culture? How will it now rely on its old stories, myths, legends and artefacts to induce a change in this new national culture? This argument is supported by the academic social scientists who consider culture to be produced and reproduced through different interactions. A fairly new concept is the learning organisation which was conceived by Peter Senge as a place where people at all levels are in a continuous state of learning and individual learning results in organisational learning (Mullins, 2007). Although it may seem as a utopian concept but it strengthens the academic social scientists view of the is culture which is in a state of continuous re-production. Therefore one can agree that the culture of the learning organisation would be one which would continuously change with every new organisational learning. At the learning organisation the has culture would be seen as one which would bound learning and may not appeal to the intrinsic sense of the employees to challenge, learn and achieve. On the contrary critiques like Harrison argue that the sum of the learning of individuals does not necessarily equal organisational learning (Mullins, 2007) Pixar is one such organisation which believes in creativity and learning at not only the artistic level but the technical level as well. The underlying reason for such a belief is that a movie contains many ideas all of which do not necessarily come from the producer or the creative head, but these ideas come from people dealing with cameras, characters, lightening etc. Pixar follows a peer culture where they have open discussions and exchange of ideas over any piece of ongoing work. They also have peers who look at and analyse daily motion work, unlike Disney where only a small senior group has the responsibility to do so. Therefore, at Pixar learning occurs from all directions and all employees which is due to its belief that everyone should have the freedom to communicate with anyone and it must be safe for anyone and everyone to offer ideas. That is how they foster collective creativity and learning (HBR, 2008). Organisational culture and the psychological contract The psychological contract of employees is another component which may be viewed in the light of the two perspectives of organisational culture. If the has culture is considered the psychological contract may be seen as the same for all employees as all share the same basic assumptions and clear controls are in place and hence the employer and employees may be contracting with each other on the same set of expectations. On the other hand the is culture will produce many different psychological contracts of employees and it will become very hard for the organisation to manage them, as each individual on the basis of their different interactions and interpretations will have a different set of expectations. (Herriot and Pemberton, 1995). The dilemma in cultural practice A major problem for an organisation can be sticking to any one of these cultural ideologies. This is due to the fact that an organisation on one hand may have an espoused culture i.e. how its senior management describes it and on the other hand it may have its in-practice culture i.e. the culture as it is experienced and lived by its members. Therefore even if it claims to be following a certain ideology it will always have more than one culture running in the organisation. Organisations rarely possess just one unified culture. One culture that superimposes the organisation culture is the stitched together patch of sub cultures in an organisation which may be overlapping and conflicting as well. (Brown, 1995) We see this conflict in the organisational culture of Nokia where on one hand it claims to nourish new ideas and innovation amongst employees (http://www.nokia.com/careers/nokia-as-an-employer/nokia-way-and-values) where as on the other hand it seems to have lost a head start at touch screen technology. This was when its stifling bureaucratic culture killed the idea of a smart phone with internet and touch screen technology and the management reasoned it to be a development Nokia would not be interested in. (http://timesofindia.indiatimes.com/tech/news/hardware/Nokias-bureaucratic-culture-troubles-new-CEO/articleshow/6637291.cms).However, recently we see that Nokia is struggling to compete in the same market. If the management would have actually maintained the culture they claim, and would have fostered idea growth, they would probably have been ahead of apple today. The concept of Organisation Socialization The managerial writers believe that a process of organisation socialization has to be followed with new employees of the organisation in order to make them learn the culture so that they can follow it and survive in the organisation. (Edgar schien, 1979 Cited in Buchanan page 650). It must be remembered that these writers believe that culture must be tolerated as it is something an organisation has. But when organisations like Disneyland are considered, it may be argued that the organisation socialization process consists of two parts. One is the formal socialization where the new recruits attend the University of Disneyland on an apprenticeship programme. This is where they learn the history, philosophy, language and values of the company. The other is the informal socialization mechanisms which are also very well developed at Disney land. New recruits at some point learn through their peers that the job they are assigned, the costume they wear and the area of the park they are allotted are actually determinants of their social status at work. At the same time they also learn about Getting back at misbehaving guests by tightening seat belts, slamming breaks suddenly and drenching people standing at river banks (Brown, 1995). Now, this informal socialisation is actually another sub culture within the organisation which is limited to the employees. Hence, this reinforces the ideo logy that culture may not necessarily be taught but may be born through social interactions. Organisational Culture and Motivation When discussing motivation and culture, one may argue how a culture of motivation may be left to be developed by the social interaction of organisational members. In such an area, the organisation may have to provide a cohesive culture which can offer employees both extrinsic rewards and intrinsic rewards such as bonuses, promotions, and stories, rites and ceremonies which create feelings of belonging. An organisation may also have to employ threats of punishments such as unwanted transfers, demotions and salary decreases to deal with certain cases of lack of motivation (Brown, 1995). Here we see that the views of managerial writers are more practical of providing a certain has form of culture to keep motivation in place. Bringing about Cultural Change The managerialist writers believe that culture can only be changed by changing the basic assumptions by the senior management (Schein 1979) we see that these writers specifically Schein are also compelled to believe and have written that when an organisation is in the last stage of its development i.e. maturity where it may also see declining profitability and loss of key people and outsiders have to be brought in to manage the organisation, such an influx of outsiders may induce cultural change. (Brown, 1995). Although, Schein states that such a change occurs due to change in the stage of organisational development (from birth and early growth to organisational midlife to organisational maturity) but it may be argued on the basis of the academic social scientists that such a change was induced by the change in key people and new social interaction induced a change in culture. Change is therefore viewed as intentional, predictable, pre-determined and brought about after careful planning, thus it follows a rational step-by-step procedure to effectively manage change(e.g. Kotter, 1996). An argument for cultural change is that changing only one factor as suggested by managerial writers such as a basic assumption may not be enough to bring about a cultural change. Ram Charan gives the example of cultural change at Home Depot involves multi-directional changes in the ways people worked to support the business model. A change was made to four main dimensions: Behaviour expectations were clarified and identification and measurement methods were put across. Metric such as data quantifying customer perceptions of the home depot experience clarified the expectation of accountability. Processes of how work was done were changed to fit the new culture e.g. instead of the old memos a video cast went out to all stores which focused on the upcoming promotions, new product lines and sales targets and bonuses for the week ahead.of new product lines, the revenue needed in the last week. Specific Programmes were put into place to support the cultural change e.g. competitive simulation and role-playing exercises where employees had to act out situations which clarified to them why the huge changes were made. Changes in the organisational structure made it easier to follow the new culture e.g. changes were made in purchasing processes to lower costs. Cultural change management takes place in an open system where the organisation has to simultaneously react to external needs and demand. In the recent years, factors such as globalisation, diversity, equality, increasing number of immigrants and avoiding discrimination have had a vast impact on how organisations manage cultural change. Is cultural change manageable? Cultures are a complex social phenomenon produced as a result of interactions. Therefore they are a product of humans, created by humans, sustained by humans and therefore can also be changed by human intervention. Therefore even if it is not planned to be changed, it will change as the social interactions change (bate, 1994) page 137 The main question is whether cultural change is manageable? i.e. whether persons can change culture deliberately, intervene by will and change the path of development of culture. This is where cultural change programmes fail to succeed since they do not take into account studying in detail the culture that has to be changed. An in-depth knowledge of the current culture is the basis for managing cultural change. (bate, 1994) page 137-138 Organisational Culture, Structure and Strategy What we notice and experience as cultural change depends directly on how we conceptualize culture (Meyerson and Martin, 1987 cited in Bate, 1994) page 9 The supporters of the has culture see culture as a component of an organisation which is no different to the other components such as structure, strategy, staff and so on. (Bate, 1994) page 11 One such model which details this is the Mckinseys 7-S framework which puts culture i.e. shared values at the centre of all the other components (Structure, Strategy, Systems, Style, Skills and Staff) (Peters and Waterman 1982 cited in bate,1994)page 11 Hence culture in this framework is treated as a variable which influences and is influenced by all the other organisational components. Hence Culture has an influence over organisational effectiveness in two regards, firstly its strength and secondly how well it is aligned with the other components (e.g. the structure-culture fit).Therefore from this perspective, changing culture is equivalent to a mere tasking of removing a faulty component and inserting a new one. (Bate, 1994 page 11-12) On the contrary, the supporters of the is culture conceive culture as synonymous with organisation i.e. an organisation is culture. They see culture as a paradigm which is defined by interpersonal organisational life. Therefore they see cultural change to be the same as organisational change. Since there is no bifurcation between organisation and culture therefore change in one will automatically lead to change in another and thus no separate strategies are required for each. (Bate, 1994)page 14 Another argument against strong cultures is that they have a development strategy for culture but no change strategy and so they are more likely to get trapped in their own culture. An example of such is the Hewlett Packard case where its ideology of doing things the HP way offered some form of comforts to the employees which backfired and employees were so busy being nice to each other that they avoided making commercial decisions which went against any other employee (such as laying off or relocating people). HPs intense humanistic ways lead to the employees viewing their privileges as rights e.g. refusal to relocate to other divisions made some divisions less competitive (bate, 1994) page 127 -128 On the other hand the has perspective which reinforces the importance of a strong culture is attractive from the view point that organisations can easily audit their cultures and be proactive in changing or strengthening the shared basic assumption and they can even bring about intentional change through the process of reculturing (Stoll, 1999). The has culture takes culture as, a separate component in an organisation and hence deals with issues such as strategy culture fit and so on. Weick (1985) and Hennestad (1991) argue against such a perspective stating that culture and strategy are substitutable for one another and culture is a strategic phenomenon and strategy is a cultural phenomenon. This implies that from such a perspective formulating a strategy of any kind is actually a cultural activity which will bring about engagement in a cultural change (Bate, 1994). A real life example of such a scenario would be when a company changes its strategy from a production oriented strategy to a market led strategy, this actually brings about a cultural change where a culture encouraging market research and up-to-date market knowledge is born. Further, the perspective implies that cultural change is actually strategic change where moving from one culture to another actually moving from one strategy to another. (Bate, 1994). A real life example of this perspective would be when a company like Disneyland in its organisational socialization stage declares to its employees that customer is king , this is in itself a strategy of being customer oriented. Pg 17-23 Limitations of the two cultural perspectives The managerialist perspective of organisational culture has a number of limitations. However, arguably it limits a deeper understanding of organisational culture and analyses only surface cultural factors such as taken-for-granted values and basic assumptions held in unity by the organisational members as described by Schein (1985). Secondly, it does not take into account the impact of the external environment on organisations which may play a role in determining change processes. The social perspective on the other hand gives a detailed insight into organisational culture, it opens up to dynamic areas of culture. But it requires the collection of very rich qualitative date which may not necessarily provide a clear pathway for action and interpretation of the data becomes a tedious task (Prosser, 2007) The management of organisational change is therefore understood from an open systems perspective in the organisations reaction to external forces and its adaptation and responsiveness to external needs and demands. Conclusion There is a lack of a definite way to define, control and change organisational culture. This may be due to the fact that researchers who work on this topic themselves come from different cultures and consider different elements to be part of organisational culture. The early researchers took a more philosophical approach to the topic. A reason for this might have been the unproven influence of culture on management and organisational practices. Later the academic social scientist gave a more externally-oriented approach which may have been due to the evolution of organisational culture and its impact on organisations (Stefan and Liz, 2000). The essay, based on various theoretical arguments, suggest that there is a broad scope for debates relating to whether culture can be changed or influenced, depending on how culture is defined. Most of the authors unite on the notion that culture can be changed but they differ on how and to what extent this can be done. They also differ on the fact if culture is only followed on the surface or adopted whole-heartedly. Another area covered was the debate about unification of employees on the basis of a unified culture. Cross relations of organisational culture with other concepts such as strategy, structure, motivation, psychological contract and socialization have been discussed. The essay ends with mentioning the limitations of the two approaches to organisational culture which reveal that these concepts are also influenced by the open and closed systems that an organisation may operate in.