Organisational Change and Culture - (L5)

Question 1

How has COVID-19 affected organisational culture? (Spicer 2020, Kniffin et. el 2020, Howard-Grenville 2020).

Answer 1

• According to Spicer (2020), COVID-19 has caused “large scale social and economic shock” which has consequently transformed organisational culture. Organisations on an operational level have become more cautious, placing safety as top priority, which in turn has encouraged organisations to reflect this as a part of their core values and beliefs more explicitly.
• “Managers are faced with new challenges to supervise and cultivate the development of their subordinates from much greater distance than usual.” (Kniffin et al., 2020).
• According to Howard-Grenville (2020), employees, especially senior managers and leadership, should play a role in understanding how their existing cultural toolkits can be translated to the new, in this case virtual, environment.

Question 2

Summarise the findings of the Deloitte/MIT Sloan Study into Digital vs. Traditional Organisations.

Answer 2

• 2015: Deloitte partnered with MIT Sloan to understand what differentiates digital organisations from traditional ones.
• Digital organisations are faster, more flexible, and have a different culture and mindset.
• Digitally mature organisations have been better able to respond to COVID-19 disruption.
• COVID-19 has accelerated the transition from traditional to digital organisation models and this is assumed to be the new normal way of conducting business into the future, thus building a digital culture becomes important.

Question 3

What are some definitions of organisational culture?

Answer 3

• A pattern of beliefs and expectations shared by the organisation’s members (Schwartz and Davis (1981).
• Culture is how things are done around here (Drennan, 1992).
• A pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope with its problems of external adaptation and internal integration (Schein, 1983).

Question 4

How should culture be conceived?

Answer 4

Culture should in fact be conceived not as a distinct static entity, but as a dynamic social process – organisations ARE cultures not organisations HAVE cultures.

Question 5

According to CMSWire (2020), why is culture change essential for digital transformation?

Answer 5

• Three digital culture deficiencies - functional and departmental silos, a fear of taking risks, and difficulty forming/acting on a single view of the customer.
• Where organisational culture is highly dynamic in nature, employees withdraw from collaboration and sharing information when it comes to problem-solving. Equally, organisations, especially in times like these, are more focused on optimisation and efficiency as opposed to harnessing innovation and technology.
• Firms with a digital organisational culture communicate cross-functionally, use data to anticipate and predict changing consumer preferences, and leverage the wider employee network to improve speed and efficiency.
• Company-wide buy-in is essential for digital transformation to be realised, as they are the driving force.

Question 6

With regards to Microsoft, what do they find in their research regarding digital technology? (Microsoft, 2018)

Answer 6

‘Research shows that the productivity benefits of digital technologies like AI depend on the adopting firms’ ability to reorganize their core business processes around the new technology.

This sort of transformation is more likely in cultures that promote experimentation, learning agility and a growth mind-set.

Question 7

According to Tesco, what is the right way to bring about organisational culture change?

(The Guardian, 2016)

Answer 7

Former Tesco CEO Matt Davies, in an effort to regain the trust of its customers following its controversial accounting scandal, wanted to encourage managers to display basic courtesies towards its employees to encourage better customer service.

However, instead of passing this as an instruction, this culture of appreciation was brought about through a range of staff workshops and conferences.

“This is not about a training programme, but developing a culture of appreciating one another.”

Question 8

What are the basic functions of organisational culture? Use MDLZ to illustrate an example of how these are evident in the workplace.

Answer 8

• Provides a sense of identity for members; MDLZ places emphasis on loving consumers and brands, growing every day and doing what’s right, and these values are a reflection of employees within the company.
• Enhances commitment to the organisation’s mission; MDLZ’s mission is to offer the right snack, for the right moment, made in the right way. Employees live this every day and are committed to the cause as they understand the importance of conscious snacking and how this can bring about joy and satisfaction in a healthier way. They bring about the innovation needed to make this happen.
• Clarifies and reinforces standards of behaviour; MDLZ has an established code of conduct that informs employees of how they should behave, e.g. treating people fairly, protecting confidential information and IP, and competing fairly.

Question 9

According to Mullins (2010), what are two key influences on organisational culture?

Answer 9

Key influences include history, primary function and technology, strategy, size, location/national culture, management and leadership, and the external environment.

• Strategy: MDLZ current strategy is centred around growth while reducing the range of products under brands - maximising the value and growth of top performers. This, from experience, creates a culture with pressure on various sales and marketing teams to come up with more meaningful innovations that will appeal greatly to the consumer. However, this also stifles innovation in some way as projects now have to meet minimum hurdle rates and targets in order to be approved.

External Environment: one of the key political and social factors influencing organisational culture at MDLZ, and how it conducts business, is the incoming HFSS government legislation which seeks to combat obesity, especially within children, by restricting the promotions of HFSS products by price and location. This emphasises the mission of the company and pushes a culture where this becomes the heart of product manufacturing and innovation.

Question 10

Why can culture change? Give example of M&A.

Answer 10

• Composition of the workforce.
• M&A.
• Planned organisational change.
• Responding to internet/tech/digital change.
• Innovation and new ways of working.
• According to Dixon (2005), culture was responsible for 30% of failed integrations. Companies with different cultures experience difficulty in decision-making and operating effectively.
• Culture affects decision-making style, leadership style, the ability to change, how people work together, and beliefs regarding personal success.
• An example of where organisational culture led to M&A failure was Daimler-Chrysler. The main cultural issues included hierarchical differences (Daimler was hierarchy-oriented with a clear chain of command whereas Chrysler took a team-oriented approach), innovation differences (Daimler were focused on quality and reliability whereas Chrysler focused on creative designs at competitive prices), and employee resistance (employees on both sides didn’t want to work with each other and adopted a silo mentality, and many key seniors resigned).
• To prevent this, Deloitte emphasises the importance of both firms involved focusing on culture. Owners should be brought together to discuss their cultural differences, considering the strengths and weaknesses of each and coming to a compromise that brings together best practices from both sides. Decision-making processes should be free from cultural differences, and the adapted culture should appeal to both sets of employees to encourage commitment towards a shared vision.

Question 11

Explain Herman’s (1970) Cultural Iceberg elements?

Answer 11

Above the water, we see the formal (overt) aspects - the way the company says it gets things done.

This is often through goals, technology, structure, policy, products/services, and financial resources, and these things are all visible to outsiders and those within the business environment.

Below the water though, those within the company see how they really get things done through the informal (covert) aspects - the informal organisation.

These include beliefs and assumptions, perceptions, attitudes, feelings, values, interactions and norms.

“The hidden and informal aspects… will ultimately help or hinder an organization’s success.”

Question 12

What are the three elements of Schein’s levels of organisational culture?

Answer 12

• Artifacts.
• Espoused beliefs and values.
• Basic assumptions.

Question 13

Explain the Artifacts element of Schein’s levels of organisational culture?

Answer 13

Similar to the iceberg model, artifacts consist of a company’s physical environment, language, technology, products, and stories.
This also includes organisational processes and how they shape behaviour, and structure and hierarchy. However, while these things are visible, they are difficult to decipher in terms of what they mean. Attempting to decipher deeper meanings and assumptions of such artifacts is near impossible because interpretations reflect one’s own feelings, which may not lie true to those within.

Question 14

Explain the Espoused Beliefs and Values element of Schein’s levels of organisational culture?

Answer 14

To gain a better insight, one can tap into the espoused beliefs and values of an organisation – the norms that shape how members behave day-to-day. These are developed over time where a group often tests whether beliefs and values work in different scenarios, and those that do become established and true, whereas others may be phased out. As beliefs and values continue to work, they are reinforced over and over again until they become norms and ways of behaving. Where espoused beliefs are congruent with underlying assumptions, they can bring the organisation together, creating a culture that provides a sense of identity, enhances commitment to the organisation, and reinforces behaviour. However, such values and norms may leave some behaviour unexplained, thus it’s necessary to understand basic underlying assumptions.

Question 15

Explain the Basic Assumptions element of Schein’s levels of organisational culture?

Answer 15

Basic assumptions are often taken for granted as a result of “repeated success in implementing certain beliefs and values. Where assumptions are strong, any other behaviours based on different assumptions will be neglected. Basic assumptions are therefore undebatable as they provide the utmost stability. If one is able to understand these, it’s very easy to understand espoused beliefs and values, and artifacts.

Question 16

What are organisational values according to Buchanan and Huczynski, 2010?

Answer 16

These are often unspoken but guide employee behaviour.

Organisation values refer to those things that have personal or organizational worth or meaning to the founders or senior management. Values are typically based on moral, societal or religious precepts that are learned in childhood and modified through experience.

Question 17

What are the 7 dimensions of organisational culture defined by Chatman and Jehn, 1994?

Answer 17

• Attention to detail.
• Outcome orientation.
• People orientation.
  = Team orientation.
• Aggressiveness.
• Stability.
• Innovation and risk taking.

Question 18

7 Dimensions of Organisational Culture: Explain attention to detail.

Answer 18

The degree to which employees are expected to exhibit precision, analysis, and attention to detail.

Question 19

7 Dimensions of Organisational Culture: Explain outcome orientation.

Answer 19

The degree to which managers focus on results or outcomes rather than on how these outcomes are achieved.

Question 20

7 Dimensions of Organisational Culture: Explain people orientation.

Answer 20

The degree to which management decisions take into account the effects on people in the organisation.

Question 21

7 Dimensions of Organisational Culture: Explain team orientation.

Answer 21

The degree to which work is organised around teams rather than individuals.

Question 22

7 Dimensions of Organisational Culture: Explain aggressiveness.

Answer 22

The degree to which employees are aggressive and competitive rather than cooperative.

Question 23

7 Dimensions of Organisational Culture: Explain stability.

Answer 23

The degree to which organizational decision and actions emphasize maintaining the status quo.

Question 24

7 Dimensions of Organisational Culture: Explain innovation and risk taking.

Answer 24

The degree to which employees are encouraged to be innovative and take risks.

Question 25

Explain the purpose of the CVF framework and its dimensions (Cameron and Quinn, 2006).

Answer 25

• Developed to distinguish dimensions of organisational culture.
• Rooted in considerable organisational culture research – aligns with well-accepted cultural themes – people’s ways of thinking, values, assumptions and how they process information (Harper, 2012).
• The first dimension, structure, differentiates between whether firms are effective being flexible and adaptable, or whether they are effective if they are stable and predictable.
• The second dimension, focus, differentiates between whether firms are effective when adopting an internal orientation and integration and have their own authentic way of doing things, or whether they are effective in interacting or competing with others.
• “Each quadrant represents basic assumptions, orientations and values – the same elements that comprise an organisational culture.”

Question 26

Explain the Hierarchy quadrant of the CVF with example.

Answer 26

• Hierarchy: this was heavily influenced by the work of Weber (1947) who proposed “the classical attributes of bureaucracy”, such as hierarchy, rules, and specialization. Adopting these led to increase stability and efficiency, which meant led to task-function integration, product and service uniformity, and control. Authority and rules were established as key success factors.

• McDonalds: the firm has a set of standard operating procedures and rules that allow it to efficiently produce uniform fast-food products and serve customers across all outlets. Employees tend to be young with no prior work experience. In order to move up in the organisation, employees take up a specific job, such as cooking and often become specialised in this area. Promotion is available only when an employee demonstrates extensive knowledge about their area of work.

Question 27

Explain the Market quadrant of the CVF.

Answer 27

• Market: this “refers to a type of organisational that functions as market itself”. The takes stability and structure combined with an external focus, particularly conducting business with suppliers, contractors and government organisations. While hierarchy in hierarchy control is achieved through rules and procedures, in markets, monetary exchange is at the core where in order to be competitive, profitability and building a customer base are primary objectives. This is important in an environment where customers have choice and seek value. Leadership as a result are ruthless in the pursuit of this, thus organisations are often market leaders.

Question 28

Explain the Clan quadrant of the CVF with example.

Answer 28

• Clan: this is similar to family organisations typically visible in Japanese culture. These are characterised by emphasis on family values and collaboration. Rules and procedures and competitiveness are not characteristics present here. Instead, there is a strong focus on the two-way commitment between employees and the employer through a tailored working environment. Employers encourage employee development and empowerment to encourage loyalty. The success of systems that reflected these characteristics in Japan post-WW2 caught the attention of the US.

• Salesforce: this company is a good example of a company that fosters this type of working culture. It sees its employees as trailblazers – those who innovate and learn, lead others, and build a better world for those around them. The Ohana culture is focused on bringing people together which includes customers and partners. Salesforce encourages its employees to ask, listen, show up and speak up through its commitment to equality.

Question 29

Explain the Adhocracy quadrant of the CVF.

Answer 29

• Adhocracy: these organisations are focused on innovation of products and services and development of new, cutting-edge technology which are future-oriented, with the belief that profitability will follow. Adhocracies place emphasis on adaptability and flexibility in order to deal with uncertainty. Where in hierarchies and markets power is centralised, in adhocracies this power lies with individuals or teams relative to business focus. When projects ends, teams are often disbanded or reformed.

Question 30

Explain Power Culture with example.

Answer 30

• Power: Handy refers to this as a web where the person or group, the spider, is at the centre, and hence decision-making is centralised. As a result, this culture is hierarchical in nature where power is concentrated at the top of an organisation. Family-oriented businesses and public service/trade union organisations fit this culture, and the strength of this culture is dependent on the extent to which members acknowledge and challenge this. The culture is also characterised by rules and procedures, defined roles, effective in stable environments, and emphasis on efficiency  likened to the hierarchy CVF quadrant.

• Apple (Steve Jobs): according to HBR (2012), Steve Jobs was impatient and tough on his subordinates and staff. His leadership style was highly autocratic in nature and when individuals and teams came up with concepts and ideas that didn’t meet his perfectionist standards, he would let them know about it. However, part of this was due to his passion and vision to work with the best people in order to develop best-in-class products and services.

Question 31

Explain Task Culture with example.

Answer 31

• Task: This is referred to as a net. Project work is associated with matrix structures where there’s an emphasis to get the job done, and the right people and resources are combined in order to do so. Decision making is afforded to the team handling the project itself providing a sense of autonomy and flexibility. Projects can vary in length but are naturally based on breakthrough technologies and innovation.
- Mondelez: examples of NPD projects.

Question 32

Explain Person Culture.

Answer 32

• Person: in this case, the individual worker holds the power and thus is the central point of the organisation, and the power is dependent on their level of expertise in their field(s). Due to their individuality, they have a high level of autonomy and flexibility around their work and how this is conducted. Examples include law firms, doctors, pharmacists, etc…

Question 33

Explain Role Culture with example.

Answer 33

• Role: Handy refers to this as a Greek temple and this culture is characterised with logic and rationality. Rather than one person governing everything as in the power culture, rules govern day-to-day operations and behaviour. Roles are clearly defined so everyone understands what is required of them. Much success is achieved in predictable and stable environments. Efficiency is valued more than adaptability.

• McDonalds: link to hierarchy example in CVF.

Question 34

What is Johnson and Scholes cultural web? (1992)

Answer 34

Johnson and Scholes cultural web serves as a useful tool which can be applied in order to map and reveal an organisation’s cultural elements. There are six elements which together form what is known as the paradigm – a comprehensive picture of the work environment.

Question 35

What are routines in the Cultural Web?

Answer 35

These are the ways in which members behave and act day-to-day within the organisation and reflect what is acceptable.

Question 36

What are rituals in the Cultural Web?

Answer 36

Examples include training programmes and employee networks. Rituals characterise how inclusive and invested an organisation towards its employees.

Question 37

What are stories in the Cultural Web?

Answer 37

These tend to be told by members to each other and are historical in nature. To bring this history into the present and highlight heritage, members continue to share these as a way of reinforcing how an organisation operates and its beliefs.

Question 38

What are symbols in the Cultural Web?

Answer 38

These play a part in reflecting identity of the organisation and what it stands for. Examples of symbols include awards, language and logos. Amazon’s logo is clever in sending a message to its customers. The arrow/smile points from a to z which describes the amount of product and service choice the customer has. The arrow/smile also represents a smile and Amazon’s commitment to providing excellent customer service.

Question 39

What are control systems in the Cultural Web?

Answer 39

These are the ways that organisations exercise monitoring of employees and other internal systems. Examples include IT systems, performance management systems and employee development.

Question 40

What are power structures in the Cultural Web?

Answer 40

These reflect where power is held in an organisation. Those who have the ability to make decisions hold the power and to an extent dictate the organisation’s beliefs.

Question 41

What are subcultures at the surface level? Where are they most likely to emerge?

Answer 41

• Functions e.g., production and sales.
• Geographical location of subculture.
• Hierarchy subculture e.g., managerial, and non-managerial.
• Occupation/Profession.
• Tenure – e.g., people may have been in the company for a year vs. 30 years and have difference experiences around the basic assumptions and beliefs.
• Work Contract/Patterns.
• Personal characteristics e.g., age, education, ethnicity.

More likely to emerge in complex organisations where there is task differentiation and division (e.g., by factors as above) and when employees are faced with change and uncertainty.

Question 42

How can subcultures be managed? (Workforce, 2018)

Answer 42

• Identify where these exist: these can be formed in different ways based on the factors above and at points where interaction is regular. Creating a map of the organisation can help management understand how many subcultures may potentially exist.
• Determine active culture and subculture: use tools such as the MBTI to identify personalities, communication styles, and levels of collaboration. This provides a deeper insight into how different cultures behave. Stories are a good way of developing background further.
• Think whole, part, whole: correct communication with subcultures is essential to show understanding. Thus, an organisation needs to be able to reflect its values and tie these with that of the subculture before reinforcing how this links back to the overarching organisation again.
• Address dysfunction: some subcultures can be harmful to an organisation, and this is known as a counter-culture, which contradicts dominant values. An organisation can choose to ignore, confront, enlist the positive subcultures/support, or eradicate.
• Engage subcultures: when planning change, subcultures must be involved in this process which may lead to shared, valued contributions and solutions.

Question 43

What’s the difference between pivotal and peripheral values?

Answer 43

There is a deeper level to subcultures which include (Schein, 1988):

• Pivotal values: core values tied to individual identities such as race, religion, etc… Why the company does what it does.
• Peripheral: found within sub-cultures, more flexible vs. pivotal.

Question 44

What are enhancing subcultures?

Answer 44

• Enthusiastic followers of all aspects of organisational culture.
• Strong commitment to peripheral values reinforcing the dominant culture.

Question 45

What are orthogonal subcultures?

Answer 45

• Embrace pivotal values but hold own values that are peripheral that are non-conflicting with the dominant culture.

Question 46

What are countercultures? Give an illustration.

Answer 46

• Disagree with dominant values and have values that contradict.
• Martin and Siehl, 1983: one of GM’s dominant cultural values was deference to authority, i.e., management, and these authoritative figures resided in the “executive row” at headquarters. Subordinates were given derogatory terms such as “dog robbers” or servants. DeLorean, a subordinate, opposed this value completely by sharing a story about a boss who had particular eating and drinking habits at hotels and how such hotels would go to extremes to ensure what seemed to be insignificant and unimportant needs were met. DeLorean created many stories that sent the same message; a disapproval for deference to authority and the importance of job performance over this.

Question 47

How do strong cultures create stability? (Boisnier and Chatman, 2002)

Answer 47

• Strong cultures create stability: organisations with strong cultures create clear values with the expectations that members will follow wholeheartedly. Where members understand the vision and objectives of an organisation, they are better suited to perform accordingly.

However, the imposition of stability via strong cultures can have mixed effects on performance. Gagliardi (1986) posited that organisations with strong cultures are not able to bring about significant change if core values are widely shared, thus employees resist. Whilst change can occur, this is cannot be radical in nature (Ouchi, 1983).

Question 48

How can subcultures emerge in strong cultures? (Boisnier and Chatman, 2002)

Answer 48

Martin (1992) believes that subcultures cannot exist where there is a single, strong culture, and vice versa they can if there is no real strong culture.

Question 49

What are pivotal and peripheral values? (Boisnier and Chatman, 2002)

Answer 49

Pivotal values are essential to the ordinary functioning of an organisation and members should adhere to these. Peripheral values are non-essential but should be encouraged to be taken up. Modern firms tend to emphasise pivotal values as well as peripheral ones to a lesser extent.

(Use example of strong culture at MDLZ but different departmental subcultures)

Question 50

Explain the paradoxical nature of strong cultures and countercultures. (Boisnier and Chatman, 2002)

Answer 50

On the one hand, countercultures are unlikely to emerge as they undermine the strength of the overarching organisation culture and would be met with opposition from the majority of an organisation. On the other hand, strong cultures produce countercultures as some people may not agree with an organisation’s dominant values, thus they will separate themselves accordingly. Countercultures may in fact strengthen overarching organisational structures as they can bring other subcultures together and they unite as one force against a counterculture.

Question 51

How do subcultures form? (Boisnier and Chatman, 2002)

Answer 51

Subcultures tend to be formed “based on a variety of societal, organisational, and individual characteristics”. Those found in society also creep into organisations. Emergence is dependent on the level of conductivity to subculture formation, group processes that bring people together, and how willing members are to create/join them.

Question 52

What are the advantages of strong culture?

Answer 52

• Differentiates the organisation from others.
• Allows employees to identify themselves with the organisation.
• Facilitates desired behaviour of employees.
• Creates stability within the organisation.

Question 53

What are the disadvantages of strong culture?

Answer 53

• Merging becomes difficult.
• Attracts and retains similar employees.
• Can create extreme behaviours.
• Makes adapting to changing environment more difficult.

Question 54

How do leadership styles and traits affect organisational outcomes?

Answer 54

• Several common leadership traits such as flexibility and need for achievement, are said to be central in determining the strategies and structure in many organizations (Miller & Toulouse, 1986).
• Leadership styles are also thought to affect organizational outcomes.

(Kuhnert and Lewis, 1987)

• Burns (1978) proposed that leadership style is either transactional or transformational.

• Transactional: this is where superiors and subordinates develop a mutual dependence on each other to achieve their desired outcomes – via an exchange. For example, if leaders desire employees to learn new skills or take on new roles, an employee may desire a payrise. Transactional leaders outline the roles of members to meet their personal development aspirations whilst simultaneously fulfilling the vision of an organisation.
• Transformational: “operate out of deeply held personal value systems” which are comprised of end values which cannot be negotiated. The ability to express personality and charisma allows these leaders to unite and relate to members, resulting in higher levels of performance more generally (Bass, 1985).