Recently, senior managers in many organisations have tried to change the cultures of their organisations. Explain what are they trying to do, and why they are trying to do it. Assess the chances of their success.

University Degree Social studies

B200 TMA05 Id ; U0184571

Student : Francesco Paolini

Tutor : John B. Reid

Course : B200 01K

Date : 24th July 2002

Recently, senior managers in many organisations have tried to change the cultures of their organisations.

Explain what are they trying to do, and why they are trying to do it. Assess the chances of their success.

INTRODUCTION

This essay will be divided into three parts ; the first part will explain the initial statement, giving some background information and addressing the question of what are senior managers trying to do when they attempt to change their organisational culture and how significant these changes in culture are in the modern corporate world. The second part will explain why managers are trying to do all that with some examples of big global corporations, also using the mainstream and the critical approaches to organisational theory. The third and final part will attempt to assess the chances of senior management’s success in changing the culture of their companies ; how easy is it to change eradicated sets of corporate beliefs, ways of working, processes, values, etc.?

WHAT ARE THEY TRYING TO DO ?

Recently, senior managers in many companies are attempting to introduce changes in their organisation’s culture ; from their point of view they are trying to achieve few things. One important objective to be achieved is to instil values that can be shared company wide ; from the management to the shop floor. This is usually done by setting up corporate goals, values, principles that can inspire employees to a sense of belonging to the organisation, a collective identity. Many successful companies use this approach, as its believed to, in the end, deliver what the senior managers really want to achieve, which is profit maximisation and growth.

Organisational culture has been analysed at many levels, beginning in the 1970s in the USA. There, to get through a deep economic recession, American management theorists begun analysing the emerging Japanese companies and their totally different and successful approach to management. Then looking at successful American organisations with the influential work of Peters and Waterman in the 1980s with the important text “In Search Of Excellence”. The important notion of “excellent Companies” comes from Peters and Waterman’s work on organisational culture. At academic level, the Business interest shifted from individual management techniques to the study of the organisation as entities with all the sociological implications. The concept of organisational culture, used interchangeably with the term corporate culture, define a set of goals, values, beliefs that are built within a company over time. Organisational Theory is very much connected with other fields of the Social Sciences. The likes of Sociology, Politics, Economics and so on. Some important figures of the social sciences like Max Weber, Karl Marx and Emile Durkheim have greatly contributed, directly or indirectly, to the organisational theories. Some very representative example of organisational culture are global companies like McDonalds, Hewlett-Packard, IBM. In each one of these three companies the corporate culture is very developed. For example at Hewlett-Packard its called the “HP Way”, a set of beliefs, objectives and guiding principles. Some of the HP Way values are ; communication at all levels of the hierarchy, informality, openness, teamwork, customer care, trust, autonomy, quality, etc. Hewlett-Packard’s values are shared by most employees, and the HP way its visible within the company at all levels ; the offices layout at every HP branch is done to reflect those values, to facilitate ad hoc meetings and brainstorming sessions. Managers at HP use a curious technique to manage their departments or sections, they call it MBWA, that is managing by walking around, and embodies some of the values of the HP Way ; those of trust, autonomy, confidence and so on.

WHY ARE THEY TRYING TO DO IT ?

This is a preview of the whole essay

WHY ARE THEY TRYING TO DO IT ?

There are many reasons why senior managers want to introduce culture changes programmes in their companies ; the final objective lays with the company success, to make their companies successful, but this is a too general statement and needs to be expanded : by introducing culture changes, some senior managers are employing some of the notions of organisational theory. They want the workforce to share their objectives and goals in the belief that an happy and committed workforce will deliver a better performance. In many companies now, amongst these I can mention my current employer Entertainment UK Ltd (EUK), culture changing programmes are introduced in many forms. EUK is part of the Woolworths Group and is a very big organisation. At EUK culture projects are forming, employees’ opinions are canvassed through numerous surveys to assess what the staff thinks, if they are “buying in to” the new organisational culture stereotypes, or if they are only there from 9 to 5 and wait for pay-day at the end of the month. Mission statements are appearing ; this year’s mission statement at EUK is “to make us and our suppliers more successful”. The EUK’s code of conduct embodies the company’s value and is called COCODE, which stands for cooperation, openness, commitment, ownership, development and excellence. A seasonal COCODE award, which consist in money, recognition (as your picture is taken with the company’s MD is printed in the company-wide journal and in the company web site and Intranet site), is assigned to people that best represent the corporate culture. Corporate colours are used everywhere, as this is common to many companies inspired by the likes of IBM. All these contributes to create a collective identity ; the employee should identify with the company he/she works for and that link, in some cases, is so strong that replaces organised religion, love for the football team and even family belonging. Some Japanese employees were asked to list their loyalties (Needle, Chapter 1, p 41), they listed them as follows : company, state and family. The unions are less important in this new type of company, where communication is done from the management to the employee. So we see, especially in companies like IBM, HP, McDonalds and many others, even in the UK, a reduction of Union membership within the organisation, and the union loses its power. However, culture changes is not something that can be achieved overnight, at times it can be a long a frustrating process, firstly to eradicate the “old culture” , to then replace it with the new one. Especially in large organisations this can be quite a task for the management team.

Organisational culture theory has few different approaches ; two separate and distinct ways of studying and analysing corporate culture. These two approaches are : the mainstream approach and the critical approach. These theories have, as a starting point, the classical theories like the “division of labour” from Emile Durkheim, also Weber and Marx’s theories are very influential. Many aspects of these two theories have been discussed throughout this essay.

WHAT ARE THE CHANCES OF SUCCESS OF SENIOR MANAGERS TO CHANGE THEIR ORGANISATION CULTURE ?

What are the realistic chances for the management to be successful in changing corporate culture? To answer this question we need to have a look at different approaches in culture changing programmes and assess their strength and weaknesses. So far the points discussed seem to point that culture changes are for the better, at least looking at the examples of Hewlett-Packard, IBM, Body Shops and other American corporations. Culture changing programmes are also taking place elsewhere ; in the UK for example these type of corporate culture changing projects have taken place in companies like BT, Sainsbury, Marks and Spencers, Burton, and so on. However, attitude towards culture changing vary with the type of organisation, the size of the organisation and the type of organisational theory used. Sometimes, the workers see the intention of senior management to introduce culture changes, in “only another scam to force them to work harder”, this sceptic view is that of “Hotpoint” workers about the US-inspired changes (Reader 4, Ch 13, p 193). This a trait of the critical approach as resistance to culture changes are very common, and sometimes this resilience to the changes has the better of the management team and changes are withdrawn or reviewed. This was the case for Motorola, where resistance from the workforce and pressure for output defeated the disciplinary changes to “govern the soul” (Reader 4, Ch.13, p193). Also looking at survey data on employees’ attitude to changes and change programs is not favourable to culture changes. This is possibly explained with one of the organisational culture perspectives ; the “dialectical perspective”. Its theory derives form Hegel and Marx (Reader 4, CH.8, p 120) and its about the interaction between structure and human agency. The conflict between managerial control and workforce, a clear “adaptation” of the classes struggle of the Industrial revolution. Of course the attitude towards changes in culture may change as we go up on the corporate ladder, as less resistance is encountered at higher ranks of the corporate hierarchy. Scepticism is a major factor to be taken into consideration if planning a culture change in a company. Staff usually see changes as a threat to the status quo and don’t feel comfortable with it. The most radical of the workers will perceive attempts by management to champion culture changes, only as new ways of exploiting the workforce, as noted above in some examples, and that is all reduced to a more cost effective set of working practices and cheaper processes with the nicer appearances of a set of corporate goals, a mission statement or a buzz word or two to “unlock the employees’ commitment towards the organisation. There are also some critics of the organisation culture that asserts that a similar culture was present before in form of, to mention one example, the so called ”Sophisticated Paternalism”, this is reflected by companies like M & S and Cadbury in the UK. Their main features are the respect for the individual, job security and social benefits, but also a very careful screening of the recruits. All this was available well before the organisation culture times and is not originating neither from Japan or the USA. These forms of paternalism were present even in Victorian time, some argue, beginning with especially small and family owned companies, and although the number of firms with paternalistic traits has declined greatly, is still present today.

It is quite difficult to assess whether the culture changes is the cause or the effect of success of some famous organisations. Furthermore, is difficult to assess senior management’s chances of success, when embarking in a culture changing program ; there are many variables that need to be taken into account, these are the size of the company, the sector it operates in, the current management style, employment policy, locations, complexity, is the company a multi - cultural one, the current structure, and so on. Many culture changes programs are associated with HRM, that is human resources management, also known as SRHM, strategic human resources management. The management of culture, and of culture changes, is one of the central features of HRM. One of the most used types of corporate culture changes is the one that saw firms from the public sector, employing a more private sector oriented culture and methods.

It is worth mentioning that there are many organisation culture consultants and writers, and many of them added a perspective to this complex topic, some backing the mainstream approach and some backing the critical approach to organisational culture theory . However, the reality sometimes is that behind nice slogans and fancy new “packages” are the same theories and concepts. Changing a name from worker to “crew member” does not banishes hierarchy and class divisions, as in the case of McDonalds, especially if these so called crew members are paid very poor wages At the “McFactory” a certain types of peoples are recruited and these are ; teenagers, part timers, non-unionised and mainly cheap workers that are happy to do that job, some only for an interim period. The paradox lays in the fact that McDonalds is a “people oriented” company, one of the excellent companies, and its also very aware of its corporate culture ; with many myths, rituals, corporate goals, heroes, and many typical features of organisational culture theories.

Another one of the excellent companies that are being criticised is IBM. IBM is widely considered as a culture conscious company, it symbolise the successful global superpower but is also attacked by people asserting that its success is only the product of excess profit allowed by monopoly power over a long period of time. So for every positive thought about organisational cultures, there is probably a negative one ; the mainstream and the critical. Therefore, is not an easy task to assess the chances of success of senior managers to introduce corporate culture changes.

CONCLUSIVE THOUGHT

This essay has attempted addressing the three initial questions ; answered the first and second questions by giving a brief account of cultural changes within organisations. Used relevant examples from the beginning of the organisation or corporate culture, using Peters and Waterman’s theories. It linked it all with the more traditional academic disciplines and used the “excellent company” notion. It then focused on the reasons behind corporate culture changes programs, again using mainly positive examples successful companies that represent what good comes from these changes. Used anecdotal evidence with a personal account of organisational culture changes that was experienced “first hand” by the writer of the essay working for a big organisation in the UK. The mainstream approach and the critical approach were also used. A mention also to the concept of HRM and SHRM as a modern management tool to implement and see through culture changes. To finally conclude in the last section, with arguments pro and against corporate culture changes. At the end of this essay we can conclude that corporate culture is probably a positive thing, as it motivates people and can transform a boring 9 to 5 job to something with a little more meaning added to it. Cultural changes can sometimes be very positive and meaningful, but there are also a lot of examples to say completely the opposite, for many sorts of different reasons and motivations behind.

References :

“Organisations” by Graeme Salaman, Open University, B200 Book 4.