Organisational Culture

1. Organisational Culture BUSS4 Managing Change - Culture

2. Organisational culture sums up the spirit, the attitudes, the behaviours and the ethos of the organisation. It is embodied in the people who work within the organisation; traditions that have build up over time seem part of fabric of the buildings • In this section we use Professor Charles Handy’s way of classifying business culture to analyse the culture of an organisation • We also look at how to change a culture and assess the importance of culture

3. Handy developed four ways of classifying a business culture • The first is the power culture • Handy illustrates this as a spider’s web • the all-important spider sits in the centre and is the key to the organisation • He is surrounded by ever-widening circles of intimates and influence. • The closer you are to the spider the more influence you have • Organisations with this type of culture can respond quickly to events • But they are heavily dependent for their continued success on the abilities of the people at the centre • They will tend to attract people who are power orientated and politically minded, who take risks and do not rate security highly. • There are likely to be few rules or procedures and although this encourages flexibility it may result in unethical actions being taken in an attempt to please the boss • The leadership style is autocratic

4. Role Culture • The role culture can be illustrated as a building supported by columns and beams • each column and beam has a specific role to playing keeping up the building • individuals are role occupants but the role continues even if the individual leaves • This type of organisation is characterised by strong functional or specialised areas coordinated by a narrow band of senior management at the top • the work of the functional areas and the interactions between them are controlled by rules and procedures • Position is the main power source in the role culture • People are selected to perform roles satisfactorily

5. Role Culture • Rules and procedures are the chief methods of influence • This type of organisation is likely to be successful in a stable environment, where the market is steady, predictable or controllable, or where the product’s life cycle is long • This organisation finds it difficult to adapt to change • Such an organisation will be found where economies of scale are more important than flexibility • Or where technical expertise and specialisation are more important than product innovation or service cost – for example, in many public service organisations.

6. Task Culture • Task culture is job-or project-oriented, and its accompanying structure can be best represented as a net • Some of the strands of the net are thicker or stronger than othersand much of the power and influence is located at the at the knots • Task cultures are often associated with organisations that adopt matrix or project-based structural designs • The emphasis is on getting the job done • the culture seeks to bring together the appropriate resources and the right people at the right level in order to assemble the relevant resources for the completion of a particular project

7. Task Culture • It is a team culture, where the outcome of the team’s work takes precedence • Influence is based more on expert power than on position or personal power • influence is more widely dispersed than in other cultures. • The organisation can respond rapidly since each group ideally contains all the decision-making powers required. • Individuals find that this culture offers a high degree of autonomy • The task culture is therefore appropriate when flexibility and sensitivity to the market or environment are important, where the market is competitive, where the life of a product is short and/or where the speed of reaction is critical • Control in these organisations can be difficult

8. Person Culture • Person culture is an unusual culture • This type of culture is illustrated by a loose cluster or a constellation of stars • In this culture the individual is the focal point • There is no organisational structure • There is no overriding objective • Not many organisations can exist with this sort of culturebecause they tend to have some form of corporate objective • Control mechanisms and management hierarchiesare impossible in these cultures except by mutual consent • People do what they are good at and are listened to for their expertise. • Examples are lawyers or accountants

10. Changing the culture • When a new CEO joins a business his or her first impressions will be of the culture • Do the staff put the customer first? • Do they enjoy Monday mornings? • How do they speak to each other etc • If he is unhappy with the culture and sees it as a barrier to achieving his objectives he may want to change the culture • But can he change the culture? • Johnson and Scholes describe the culture as a complex web • A good analogy for a corporate culture is that it is the DNA of the business

11. There are so many elements to the culture that it will not be an easy job to change it

12. If it really is the DNA of the business is it actually possible to change the culture? Culture is the DNA of a business

13. Changing the culture • Handy described culture as ‘the way we do things around here’ • This tends to be very resistant to change • In 2007 Newcastle United FC appointed the hugely successful Bolton Manager Sam Allardyce to transform its underperforming stars • He brough his own results orientated approach to St James’ part • He soon found himself swamped with supporters’ furty • The Newcastle way (their culture) was for bright, attacking, flair football. • Sam did not last long

14. Changing the culture • For the CEO to change the culture he will need buy in from the employees • He will need to make them understand that there is a need for change • If they don’t believe change is necessary they will not be committed to it • They will need to really believe that it is going to happen • They will need to hear a clear and consistent message • They will need to see everyone living up to it • If for example part of the change is to cut costs and they see the CEO driving a brand new BMW they will not believe in it • He will need to look at changing every part of the cultural web • He will need to keep showing the employees evidence of change • He will need to find ways of pacifying the resistors • Culture takes a long time to evolve and a very long time to change

15. Culture change is hard – most attempts encounter problems & resistance Source: Booz & Co Perspective on Organizational Culture Change

16. Evaluation • Business leaders make lots of claims about culture among their staff • They use words like ‘positive’, ‘can do’, and ‘entrepreneurial’ • Does the fact that the leader is saying it make it true? • No! • The leader will never admit that his staff are lazy, negative or bureaucratic • A well-judged answer about culture will look beyond the hype and search for the evidence • Is there evidence that staff suggestions are welcome and valuable? • Is there evidence that mistakes are seen as learning experiences? • Is there evidence that the staff love their job and look forward to coming to work?