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ISSN 1392-1258.EKoNoMIKa 2009 87

FACTORS OF ORGANIZATIONAL CULTURE CHANGE

Violeta Raimonda Kulvinskienė Eleonora Seminogova ŠeimienėAssociate Professor Doctor of Social Sciences Project ManagerVilnius University Department of Management TNS Gallup Ltd. Saulėtekio av. 9, LT-2040 Vilnius Raugyklos st. 15, LT-01140 VilniusTel.: (370 5) 2366134 Tel.: (370) 615 4478 6E-mail: violeta.kulvinskiene@ef.vu.lt E-mail: eleonora.seimiene@gmail.com

Abstract. Organizational culture has a significant impact on the organization members’ life and in general it helps a company to achieve positive financial results. Organizational culture is very important in achieving internal integration and implementation of the strategy of adaptation in the external environment. Therefore a lot of companies explore their organizational culture and leaders, if needed, seek consciously to form, develop and change organizational culture.

The aim of the article is to analyze the theoretical attitudes towards organizational culture change, to present research results of furniture manufacturing company‘s organizational culture, to describe the aspects that had impact on the organizational culture change and the matrix of organizational culture management.

The object of the research is factors that have impact on the organizational culture change. Methods of research: analysis and generalization of literature, opinion survey of organization

members by means of the designed questionnaire and in-depth interview as well as comparative analysis.

Results of the research show that organizational culture change during 2006–2008 can be des-cribed as the movement from the “hierarchy” type towards “adhocracy” type and the main factors that had made impact on the organizational culture change were persons from outside incorpora-ted in the organization and the installation of new technology. The main conclusion of the article is that it is important to establish and ensure continuous monitoring of the organizational culture, to estimate factors that have impact on the organizational culture change and to establish the matrix of organizational culture management in order to manage organizational culture in the right direction.

Key words: organizational culture, organizational culture change, factors of organizational culture change, organizational culture management.

Introduction

Organizationalculture isoneof themostimportant factors of company’s success or failure. Each company has an orga-nizational culture, and depending on itsstrength, the organizational culture mayhave a prominent impact on the members oforganization,theirvaluesandbehavior.

Organizationscanbeflexibleorstagnant,innovative or conservative, focusing on their external or internal environment.Makingresearchin theorganizationssci-entistshaverealizedrecentlytheimportantroleoforganizational culture in the livesof organization members and in generalthe contribution of organizational culture

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into the company’s successful perfor-mance.Nowadays due to the changes ofmicro and macro environments the forma-tion of strong, integral, based on common valuesorganizationalculturebecomesin-creasingly relevant to ensure the success of thewholecompany.Thatiswhyanumberof companies conduct research of their ownorganizationalculture,andtheirlead-ersattempttomanagetheirorganizationalculture consciously – to form, develop and changeit,ifnecessary.

the purpose of the research is to inves-tigate theorganizationalculture (thecaseof furniture manufacturing company), to make comparative analysis of organiza-tionalcultureintheyears2006and2008,to identify and describe the changes of organizationalcultureandthefactorsthathad impact on it, to create a matrix of orga-nizationalculturemanagement.

Theoretical aspects of organizational culture change

The factors that form organizational cul-ture and have impact on it are presented andgroupedinthescientificliteraturedif-ferently. The examination of the varioussources of scientific literature suggeststhat the said factors fall into three groups (Schein, 2004;Driskill and others, 2005,p.53;Schabracq,2007,p.31–37):1. Factors indirectly influencing organi-

zational culture (macro-environmentofanorganization).

2. Factors directly influencing organiza-tional culture (micro-environment of anorganization).

3. Factorofleader’simpact(primaryandsecondary mechanisms, methods of the changeoftheorganizationalculture).

Factorsindirectlyinfluencingorganiza-tional culture – macro-environment of an organization-consistofeconomic,social-cultural, political-legal, scientific-techno-logical, natural environment and interna-tionalevents.Factorsdirectly influencingorganizational culture can be describedasthemicro-environmentofanorganiza-tion, which consists of consumers and cus-tomers, partners and other organizations(Driskillandothers,2005,p.53).Thethirdfactor that has impact on the formation and changeoforganizationalculturearelead-ersoftheorganization:i.e.beliefs,valuesand their building techniques brought by organizationfoundersandlaterbyitsnewleaders.

one of mysterious aspects of the orga-nizational culture is that two companies,operating in the same environment, pro-ducing similar products by means of simi-lar technologies and having similar origin of founders, function quite differently in thelongterm(Schein,2004,p.225).Thereasons for this are different attitudes, val-ues and goals of the founders and leaders oftheorganizations.Thebiggestinfluenceontheformationoforganizationalcultureis exerted by the organization founders(Robbins,1993,p.609;Driskill andoth-ers,2005,p.171).Thefoundersnotonlydesign the basic purpose of the organi-zation and the environment in which itfunctions, they also select other members of the organization, and shift their workand efforts in the direction necessary for theorganization.Therearemanagerswhocreate an organization and develop anorganizational culture by using such per-sonal characteristics as charisma (Schein, 2004,p.245).Charismacanbedescribed

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as CEo’s ability to attract the attention of the subordinates and to pass on to them the mostimportantvaluesandbeliefs.Howev-er, not all leaders have charisma, therefore, they use other mechanisms in the forma-tionanddevelopmentoftheorganizationalculture.TheTableshowsthatmechanismsembedding beliefs and values of leaders can be divided into primary (establishment of culture) and secondary (expression and reinforcement of culture) mechanisms (Schein, 2004, p. 246). Primary culture-embedding mechanisms are the most im-portant tools that managers can use to train members of the organization, how theyshould understand , think, feel and behave inlinewiththeirownbeliefs.

all primary mechanisms for the stren g- theningoforganizationalcultureareclose-lyinterrelatedandaffectoneanother.Theirdivision into six groups shows how leaders canshapeanddeveloporganizationalcul-ture.As researcher of organizational cul-tureE.Scheinstatesthatthereisnoneedto develop special training courses for the

new members to understand and learn the assessed values of the organization: thevaluesoftheorganizationareclearlyvis-ible in the daily work (Schein, 2004, p.262).

Secondary cultural expression and re-inforcement mechanisms (organizationalstructure, systems, procedures, rituals, sto-ries)inayoungandgrowingorganizationmaintain and strengthen the primary mech-anismsthatcreatedorganizationalculture,but theydonot form it.On the contrary,inmatureandstableorganizationthesec-ondary mechanisms become the primary ones for the formation of organizationalculture(Schein,2004,p.262).Secondaryexpressionandreinforcementoforganiza-tionalculturemechanisms(organizationalstructure, procedures, rituals, physical space, and stories) are not as strong and clear as the primary mechanisms. In or-der to understand properly the secondary mechanismsmonitoringoforganizationalleaders and their real behavior has to be undertaken; secondary mechanisms also

Table. Mechanisms embedding beliefs and values of leaders

Primary establishment of culture mechanisms

Secondary expression and reinforcement of culture mechanisms

What leaders pay attention to, measure, 1.and control

Organizationdesignandstructure1.

How leaders react to critical incidents2. Organizationalsystemsand2.procedures

observed criteria by which leaders 3.allocate scarce resources

Organizationalritesandrituals3.

Deliberaterolemodeling,teaching,and4.coaching

Designofphysicalspace,facades,4.and buildings

observed criteria by which leaders 5.allocate rewards and status

Stories, legends, and myths about 5.people and events

observed criteria by which leaders 6.recruit, select, promote, retire, and excommunicateorganizationmembers

Formalstatementsoforganizational6.philosophy, values, and creed

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reveal much to the new members about the organizationanditsculture.Itisimportantthat secondary mechanisms may help man-agers to strengthen primary mechanisms, butforminganorganizationalcultureman-agers can never start from the secondary mechanisms.

Culture of the company, which was designed and developed by the leaders, is usually fairly stable and rooted, it is dif-ficult,althoughpossible,tochangeit.Or-ganizationalculture isfirmlyanchored invalues and attitudes to which the workers are accustomed and committed. Organi-zationalcultureisalsoprotectedbymanyother factors such as rituals of the organi-zation,designedphysicalspaceandfacili-ties, philosophy of the statute, promotion and recruitment practices, organizationalstructure.Thus,theorganizationalculturecan be a direct or at least indirect result of the actions taken by the organizationfounders/leaders.

It is important to discuss the root causes, which may lead to the fact that organizational culture must be changed.First, the organizational culture must bereplaced because the company’s core val-ues due to the change in company’s mac-ro-environment and micro-environment are no longer ensuring the success of its operations and competitiveness (luthans, 1989,p.55,Burtonandothers,2004).Infact,theneedtochangetheorganizationalculture arises when indicators show the de-cliningefficiencyof theorganizationandit suffersafinancial loss (Robbins,1993,p.625;Driskillandothers,2005,p.142).Thus, the organization needs to adapt tothe changing environmental conditions or itmaynotsurvive.Second, theorganiza-

tion founders and managers do not always develop a strong organizational culture,therefore, in such cases for the company to survive a new leader must be appointed andhe/shewillestablishastrongorganiza-tionalculture(Luthans,1989,p.53,Rob-bins,1993,p.625).Ingeneral, tochangeweakorganizationalcultureismucheasierthan the strong one, which is deeply rooted intheconsciousnessoforganizationmem-bersandisplacedintheorganizationun-der the procedures, physical layout of the buildings,etc.

In organizational culture change pro-cess leaders must be change agents and theymustbeable tochange theorganiza-tional culture, to convey new values and newways of behavior to the organization(Schabracq, 2007, Cameron and others, 2006;Driskill, 2005).E.Scheindescribesindetailtheimportantroleoforganizationleaders/managers: theroleof the leader inthe organizational culture change processvaries depending on the different stages of organization development. It is importanttoanalyzewhatfactorsmighthelpleaderstoinfluenceorganizationalculturechange.First,managers can changeorganizationalculture by using primary culture establish-ment and secondary culture expression as well as reinforcement mechanisms. How-ever,whenduetothepastsuccessorganiza-tionalculturehasstabilized,leadersnoticethatorganizationalculturechangebecomesmoreandmoredifficult,culturalchangere-quires more resources, time, efforts and oth-erwaystoaccomplishit.Thus,dependingon the stage of organization development(the establishment and early development, growth and maturity) ten ways to change organizational culture can be identified

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(Schein,2004,p.291;Kasiulisandothers,2003,p.127)(seePicture1).

In establishment and early develop-ment stage organizational culture is apositive and strong force, which must be furtherdeveloped.Inthegrowthstagesub-cultures form in organization and at thisstage managers can choose the acceptable values from subcultures and change orga-nizationalcultureintheneededdirection.In maturity stage the major part of the el-ementsformingtheorganizationalculturemustbechanged.

In order to make the change of the or-ganizational culture effective, employeesshould be involved; the results alreadyachievedshouldbeconstantlyhighlighted;effortsshouldbemadetoinfiltratetheor-ganization and feel every aspect of it; itshould be shown that there are no losers andeverychangeisonlyforthebest;em-ployees should be encouraged to devote themselves to the new ideas and the focus on the desired culture should be constantly maintained(Armstrong,2001,p.125;Bur-tonandothers,2004,p.315).

In order to change the organizationalculture the leader must first know what

elements theculturecontains.Employeesshould be encouraged to change the old organizational culture and implement thenew ideas, therefore they should be includ-ed into the organizational culture changeprocess, and new organizational cultureshould not be “imposed” to them. Orga-nizationalculturechange“fromthegrass-roots”, takesaconsiderable time:at least3–5years.Itisimportanttorememberthatvalues, behavior and actions of the lead-ersspeakforthemselves:workersreceivesignificantlymore information from theirleaders’ real behavior than they would ob-tainonlyfromthewordsspoken.

Research methodology

to indentify the change aspects of the or-ganizationalculturetheresearchoftheor-ganizationalcultureinthefurnituremanu-facturing company was made by means of quantitative and qualitative research methods. The study was implemented intwosteps.

ThefirststeptookplaceinDecember,2006.Inthefirststep,theexistingorgani-zationalculturewasrecorded.Thesecondstepwasmade inApril, 200816months

Establishment and early development of organization

1. Incremental change through general and specific evoliution2. Insight3. Promotion of hybrids within culture

Growth of organization

4. Systematic promotion from selected subcultures5. Techological seduction6. Infusion of outsiders7. Scandal and explosion of myth

Maturity of organization

8. Turnarounds9. Mergers and acquisitions10. Destruction and rebirth

Dev

elop

men

t sta

ges

of

org

aniz

atio

n

Picture 1. Change mechanisms of organizational culture

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laterafterthefirststep.Inthisperiodtheexistingorganizationalculturewasrecord-edandmethodsoftheorganizationalcul-ture change were revealed. The researchwascarriedbothoutside theorganization(analysis of the articles about the compa-ny) and inside it (interviewing of organi-zationmembersbymeansofthedesignedquestionnaire and performing in-depth interviews to reveal the characteristics of the organizational culture, changes of itand aspects that had impact on the culture change).

results of the second research step werecomparedwiththeresultsofthefirststep to identify the possible changes in the company’sorganizationalculture.Havinginmindtheidentifiedchangesandwiththehelp of in-depth interviews the aspects and methods that were used for management oftheorganizationalcultureduringthere-searchperiodwererevealed.

During theresearch themanagersandspecialists of the highest, middle and low-est levels working in the administration, finance,manufacturing, quality, logistics,sales, personnel, purchase, technical ser-vices and technology departments were in-terviewed.Managersandspecialistswereselected to participate in the study, because an assumption was made that seeing the internal organizational changes they willbethefirsttonoticehowchangesinfluencethe organizational culture and to identifythesepossiblechangesduringresearch.

The required sample size was deter-mined through the Creative research Sys-tems developed calculator for determining thesamplesize.

Duringthefirststepofresearch91em-ployeesweresurveyed(representing76.4%

of employees in the said departments), dur-ing the secondstepof research–69em-ployees(representing72.6%ofemployeesin the said departments) and 8 workers were surveyed (9.6 %) through in-depthinterviews.

Results of the research of organizational culture change

the data from the research carried out in 2006 and 2008 years were analyzed ac-cording to the organizational culturalcharacteristics (with a littlemodification)offered byS. P.Robbins: values and ob-jectives, risk tolerance and innovation, personal initiative, singleness of action, integration and orientation to teamwork, support by management and colleagues, control,identity,toleranceofconflictsandcommunication.

Values and objectives. In 2008 (com-pared to 2006) the number of employeeswho can strongly identify the values and objectives of the company increased by 13%.However, evenone third of the re-spondents are not sure, how they should evaluate this statement, therefore a conclu-sion can be made that while changes happen in the company, values and objectives are not explicitly declared, explained, or an-nounced.In-depthinterviewsconfirmthis,too.Average assessmentof the statementin points shows that in 2008 employees are more aware about values and objectives of thecompanythanin2006:accordingly3.2points compared to 3.5 points in 5 pointscale(ascanbeseenfromPicture2).

In the in-depth interviews such compa-ny values as high quality and many years of furniture manufacturing experience, traditions, as well as the union care about

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the company staff have been named; ob-jectives of the company are related to the growthofsalesandlong-termcontracts.

In 2008, no less than the 75.5% ofworkers pointed out that company paid great attention to the products quality as-surance (this was also mentioned during the in-depth interviews while talking about company values).Average assessment ofthestatementinpointsincreasedfrom3.5pointsin2006to3.9pointsin2008.Asthein-depth interviews revealed, this change was due to the fact that the company had taken actions to improve the quality of pro-duction, because in summer of 2007 about 50% of the entire production had waster, the company received complaints about theproductionfromthecustomersaswell.Duringtheresearchperiodtheheadofthequality department was changed, quality controllers began to check product’s qual-ity more rigorously and actively, they also began to monitor the output process and possible reasons of defect, employees who were making a lot of defects began to re-ceivepenalties.Thosemeasureshelpedtoimprovethequalityofproducts.

Tolerance of risk and innovation. In 2006 almost half of the respondentswerenot sure how to evaluate the statement, that the company focused on the new ideas and innovation, and almost one-third of the re-spondentsdisagreedwiththatstatement.In2008even62.3%of the surveyed respon-dents agreed that organization focuses onthe new ideas and innovation, and only 5.7%disagreedwith that statement.Aver-age assessment of the statement in points increasedfrom2.8to3.7pointsoutof5.

In-depth interviews revealed that dur-ing 2007 most of these changes took

place in the production section where new equipment and production planning and accounting system Navision were in-stalled. However, the second step of theresearch showed that the system was not fully functioning yet (the employees had to keep double accounts of production), as well as the employees were not trained to workwiththenewsystem.

Changes in the use of resources are con-nected with the new ideas and innovation, more productive set of equipment and en-couragementofstafftoshowinitiative.In2006almosthalfoftherespondentscouldnot answer the question whether they were encouraged to perform their job assign-ments and use as small resources as possi-ble, and more than a quarter of the respon-dents felt that they were not encouraged (mostlyspecialists).In2008nearlyhalfofthe respondents felt that they were encour-aged tofind solutions that savecompanyresources – this was pointed out by the employees of the production, quality, lo-gisticsandtechnicalservicesdepartments.at the same time , all middle and top level managers believe that they are encouraged tofindwaysandsolutionstodotheirworkusingsmallerresources.

However, changes did take place in the useof resources; failures in thecompanyare not seen as one of the phases of the learning process and employees are not encouragedtomakeriskydecisions.

Personal initiative.In2006almosthalfof the respondents failed to answer the question whether they were encouraged to showpersonalinitiative,ornot.In2008thenumber of employees who were not sure how to answer the question decreaded by half;comparedto14.9%in2006,in2008

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35.8%believethattheyareencouragedtoshow personal initiative; but at the sametime the number of respondents who think that they are completely not encouraged to showpersonalinitiativeincreasedin2008.average assessment of the statement in pointsin2008comparedwiththatof2006changed slightly: 2.8 points respectivelycomparedwith2.7pointoutof5.

Encouragement of employees to show personal initiative depends on the head of department where the employee works.For example, employees having no mana-gerial positions in the logistics department and former sales department are strongly encouraged to show personal initiative, but employees from personnel and production departments are discouraged to show the initiative.In-depthinterviewsrevealedthatCEo also encourages employees to show personal initiative and his behavior com-paredwiththepreviousCEOismoreopen:he not only participates in the meetings with department managers, he also meets with the employees holding non- managerial po-sitions and in case of problems ask employ-eesaboutthedecisiononecouldoffer.

average assessment of the statement that employees took decisions indepen-dentlybothin2006and2008isthesame:3.3points,soitcanbeconcludedthattherewere no significant changes in this area.About 60% of respondents agreed withthe statement that the manager controls onlythefinalresultoftheirworkandtheythemselves decide the work organizationissues.Analysis has shown that this per-ception is spread among the top and middle levelmanagers;specialists,however,thinkthat the manager controls their results, and workorganizationissuesaswell.

Singleness of action. the positive trend during the research period is seen in theevaluationofthesinglenessofaction:in 2008 even 66% of employees agreethat work assignments are clear and un-derstandable, in2006 thenumberof em-ployees who were of the same opinion was significantly smaller – 42.6%. It can beconcluded that the organizational changetaking place in the company had a posi-tive impact on this characteristics of the organizational culture.However, in 2008therewere5.7%ofemployees forwhomwork assignments became vague; all ofthem are employees of the from produc-tion department.Although for themajor-ity of employees of production department work assignments tasks are clear and un-derstandable, these specialists need better clarificationandmoreprecisespecificationoftheirdutiesandresponsibilities.

During in-depth interviews and an-swers to open questions in the question-naire employees pointed out that perform-ing a certain job or task, they are often not surewhethertheyreallyhavetodoit.Thecompany has official personnel job de-scriptions, but it is also indicated that an employee must carry out the instructions of ofhis immediatemanager. Inemployees’opinion, according to their job description theydonothavetodoallthatwork.Ontheother hand, part of the interviewed respon-dents agreed that precise job description of managers and specialists as it is in the caseofordinaryworkersisratherdifficult(workers in the company have extremely detailed work specifications, which in-clude all tasks and duties to be performed byanemployee.).

Control. assessment of control as one of the organizational characteristics was

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changing during the research period. In2006 46.8% of employees agreed withthe statement that there are strict rules and procedures in the company to perform a certainjobortask.In2008thenumberofemployees who agree with this statement decreasedto26.4%andthenumberofem-ployees who failed to be sure how to evalu-atethegivenstatementincreasedto45.3%.this can be accounted for by the fact that by reducing the number of managerial em-ployees some work has been prescribed to peoplewhopreviouslywerenotdoingit.In addition, employees are encouraged to show personal initiative and make deci-sions, so employees do not have the pos-

sibility to use the rules and procedures as they are encouraged to adopt other types of decisiontakingthanbefore.Rules,instruc-tions and strictness average assessment de-creasedfrom3.6 in2006to3.1points in2008inthe5pointscale.

During in-depth interviews great bu-reaucracy, which during the research pe-riod was declining and the company grew moreflexible,wasidentifiedasoneweak-nessoftheorganizationalculture.Onlyinthe production department direct supervi-sion of workers has increased and this was associated with the efforts to ensure high quality of products and reduce the number ofdefects.However, littleattentionasan

Picture 2. Average assessment of organizational culture characteristics, in points

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opposittion to direct control has been paid tothemotivationforemployees.

Integration and orientation to team-work. the company is in the process of theorganizationalculturechangefocusingon teamwork: the number of employeesfully agreeing with this statement in 2008 increasedalmost3 times; theaverageas-sessment of the statement increased from 3.3 to 3.6 points in the 5 point scale, soit can be concluded that teamwork for the part of employees is a normal daily activ-ity. In-depth interviews revealed thatdueto different nature of work in some de-partments teamwork is more usual than in others:employeesfromsalesandproduc-tion departments often work in teams and employees from personnel and technology departmentsmostlydonotdoteamwork.

However, the results of the research show that there is lack of coordination be-tween the departments: the assessment ofcoordination is low scoring, in addition, av-erage assessment in points decreased from 2.8pointsin2006to2.6pointsin2008.Theconclusion that while changes take place in theorganization the employees lack coor-dination can be made. This conclusion issupported by in-depth interviews with the respondents who said that there was often a dominating sense in the company that can be described by the metaphor “the left hand does not know what the right hand is do-ing”:differentdepartmentspursueseparategoals or employees from different depart-mentsarenotafteronecommongoal.

Support by management and col-leagues. one of the highest valued orga-nizationalculturalcharacteristicsoffurni-ture manufacturing company is manage-ment support:4.0points in2006and4.1

pointsin2008in5pointscale.Employeespointed out that they were encouraged to ask questions or talk with their immedi-ate manager. During the second step ofresearch the respondents said that their re-lationswithmanagershad improved.Butin20087.5%oftherespondentsemergedwho were not able to ask or talk with their immediate managers about the employ-ment issues (the majority of specialists workinginproductiondepartment).

It was noticed during the in-depth in-terviews, however, that part of the employ-ees fear the responsibility and therefore contact their immediate managers; later,if it turns out that the decision was wrong the employees may claim that they were encouraged to behave in that way by their manager and therefore it is the manager whoisresponsibleforthefailure.

Employees are also used to interact , share information and help colleagues to respondtoemergingissues.Bothfirstandsecond steps of research and also in-depth interviewsconfirmthehighdegreeofco-operation (Quotation from the in-depth interview: “If you have some problem or question, the most important is just feel free to ask the colleagues, perhaps not im-mediately, but they will really try to help and answer your question”). In 2008 com-pared to 2006 the average assessment ofthe statement about cooperation increased from3.4pointsto3.8points.

Identity. the assessment of several statements reflects the degree to whichworkers identify themselves with the or-ganization. Employees’ satisfaction withwork and loyalty to the organization areseen as an averageof 3.2 points in 2006and3.4pointsin2008inthe5pointscale.

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Nevertheless, dissatisfaction dropped by one third, still part of employees (special-ists working in the production department) arecompletelydissatisfiedwiththeirworkanddisloyaltothecompany.Theconclu-sion can be made that for a part of employ-ees the existing changes are not acceptable andtheyplantoleavethecompany.

In 2008 the number of employees who have no plans to leave the company in-creased 2 times (especially the employees working in the company over 10 years);therefore the number of employees loyal to the company has increased. However,there was an approximate 5% increase in the number of employees planning to leavethecompany:thesearepeopleupto35 years old, have degrees of higher edu-cation, work in the company for around fiveyears and are professionals from theproduction, logistics and personnel depart-ments.

Employees identify themselves with the company, because they can develop theirskillsandqualifications(averageas-sessmentincreasedfrom3.4to3.8points).this perception has strengthened at the end of2006and2007duetovarioustrainingsof employees (for example, time planning, creative thinking, problem solving), for which the support was received from the EuropeanUnionstructuralfunds.

Irrespective of the fact that employ-ees identify themselves with the company, evaluation of an opportunity to make a ca-reer in the companydecreased.Thiswasaffected by the fact that in 2007 the compa-ny had to replace several managers of de-partments (for example, managers of per-sonnel, technical services, production and quality departments), the sales department

wasmergedwiththelogisticsdepartment.replaced managers were the ones who had madeacareerintheorganizationandtheirstartwasinspecialistpositions.Newlead-ers who came to the company were out-siders , therefore the number of employees who believe that a career can be made in thecompanydroppedby15.3%(andmostof them were specialists from the produc-tiondepartment).

Tolerance of conflicts. In examining whetherconflictsinthecompanyarecon-sidered to be dangerous, unwelcome events and are hidden, or on the contrary – con-flictstakeplace,arediscussedandsolved,itcanbeconcludedthatconflictsareper-ceived as unavoidable, but not an unde-sirable phenomenon. Therefore, conflictsare less hidden (the number of employees whothinkthatconflictisundesirableandshould be hidden in the research period decreasedby16.2%),buttheyarenotdis-cussedandsolved(only20.8%ofrespon-dents thinkthatconflictsareimmediatelysolved);generallyconflictsaresimplyig-nored-leaderssimplydisregardconflicts,therefore no less than the half of the em-ployees failed to know how the company handles the cases of conflict. 28.3% ofemployees think that conflicts are solvedand satisfactory solution for both parts is reached. During in-depth interviews em-ployeessaid that in thecaseofaconflictnobody really listens to all sides, and a de-cisionmaybetakenwithoutfindingoutalldetailsandtherealstateofaffairs.

Communication. During the researchcommunication was mentioned as one of the most important problems of the orga-nizationalculture.Atpresent,communica-tion between different departments in the

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companyisnotefficient,theinformationin the company is usually transmitted by rumors, assistance is limited to formal government hierarchy, and informal com-munication is very limited. This is con-firmedbythephysicallayoutoftheofficesof departmentmanagers.Offices ofmostmanagers are not located close to their de-partments or in the same section; officesare located in the administrative building of thesecondfloor.Employees thinkthatthis is done to maintain the hierarchy in the company and the communication in-side the company becomes limited, as the leaders of departments are less aware of what is happening in their departments.assessment that communication is limited toformalauthorityhierarchyin2006and2008remainsunchanged:3.5pointsoutof5.Thedataalsoshowedthatbothin2006and2008onlyonefifthofemployeescom-municate informally during work and after work and the average assessment of this statement even decreased in the research periodfrom2.8to2.6points.In-depthin-terviews confirmed the given results: infact,thecompanyorganizesfewcommonfestivals,events.Everyyearallemployeesare invited to participate in the Christmas celebration party, although both specialists and managers pointed out that the party is moreorientedtowardsordinaryworkers.During in-depth interviews it was men-tioned that two years ago the company organizedsummersportingevents,includ-ing basketball games, but at present , they arenomoreorganized.happening.Toim-prove communication and cooperation be-tween departments in the company more joint l meetings and activities after work shouldbeorganized.

results of the researche carried out in December,2006andApril,2008,showedthatsignificantchangestookplaceinthosecharacteristics of the organizational cul-ture:companygoalsandvalues,toleranceof risk and innovation, singleness of ac-tion,controlandidentity.

Factors that had impact on the organizational culture change

In the analysis of the organizational cul-ture change of furniture manufacturing company the focus was made on internal organizationalchangesthathadimpactonorganizational culture change. Twomainfactors, which were used for management andchangeoforganizationalcultureintheresearch period can be distinguished in the organization(seePicture3).

to sum up the research data it can be argued that the appointment of the new CEo produced the greatest impact on the company’sorganizationalculturechange.although the new CEo began to work in thecompanyinSeptember,2006itmaybeassumed thathis influenceon theorgani-zationalculturecameoutalmostoneyearlater.Thisexplainsthefirststepofthere-search, whereby the answer “neither agree nor disagree” dominated in the numberof statements evaluation; these responsesshowed that employees at that time did not knowwhattoexpectfromthenewCEO.the new CEo began to change the com-pany’s organizational structure (cut thenumber of departments (for example, the sales department was merged with the lo-gistics department), replaced the managers of departments (for example, in personnel, technical service, production departments), and reduced the number of employees in

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the managerial system (the number of em-ployeesinthecompanydecreasedby30%:from119employeesinDecember,2006to84inApril,2008).

New technologies, installation of the Navision accounting system, also had an impact on the organizational culturechange.Astheresearchshowedintroduc-tion of the Navision system in the company was taken quite painfully by its employees since it demanded new skills from them, as well as double accounting in the produc-tion department, which required additional time.

Matrix of the organizational culture management

results of the research enable to distin-guish the typesof theorganizationalcul-ture in2006and in2008 in the furnituremanufacturing company according to K.S.CameronandR.E.Quinntypology.K. S. Cameron andR. E.Quinn dividedorganizational cultures into the types ac-cording to dimensions of two criteria (Cameron and others, 2006, p. 66). The

firstdimensionisdefinedasflexibilityandfreedom of action compared with stability and control, the second dimension is inter-nal focus and integration compared with theexternalfocusanddifferentiation.Ac-cording to these dimensions four types of organizationalculturearedistinguished:1.Clan. Such organization is a friendly

place where people can share every-thingwithone another.Theorganiza-tion is similar to a large group of rela-tives(atribe).Companyexecutivesareadvisors or fathers-guardians for the employees.Valuesoftraditionandloy-altyunitemembersoftheorganization.Mutual commitment level (between an employeeandtheorganization)ispar-ticulalyhigh.Long-termbenefitsoftheorganizationareassociatedwiththede-velopment of human resources; closerelations with workers and their spiri-tual/ psychological condition are con-sideredtobeimportant.Successoftheorganization is described by conceptsassociated with sensitivity to custom-ers and caring for the employees of the

Factors that had impact on organizational culture change

Introduction of technologies

Infusion of outsiders in organization

Installation of accounting system Navision used in production Entry of new CEO

Change of organizational

structure

Change of departments’

managers

Reduction of number of employees

Picture 3. Change factors of organizational culture

40

organization.Typicalformsofactivity:working in teams, participation and consensus.

2.Adhocracy.Itisverydynamic,creativeorganization, which values entrepre-neurship and leadership. Employeestendtotakerisks.Leadersarecharac-terized by innovation and courage torisk.Organizationmembersarerelatedamong themselves due to the dedica-tion to experiments and innovation.Long-termbenefitsoftheorganizationare associated with the new owner-shipofresourcesandgrowth.Successis associated with the unique and new products or services. The aim of thecompany is to be the leader of products orservices.Employeesintheorganiza-tion are encouraged to take individual initiative.

3.Market. Such organization is focusedon the results; themost important foremployees is toachieve thesetgoals.Efforts of employees are oriented to-wards the achievement of goals; em-ployees are encouraged to compete with each other, too. Leaders are de-termined, assertive, strict and demand-ing. Organizationmembersarerelatedamong themselves in order to defeat the competition.Organizationtakesstrongcare of its reputation and success.Long-termbenefitsoforganizationareperceived through competition, mea-surable objectives and performance.Theorganizationmeasures its successbymarketshareandpenetrationintoit;it is important for the organization tohave competitive prices and to be mar-ketleader.

Picture 4. Types of furniture manufacturing company’s organizational culture in 2006, in 2008 and in the future

Flexibility and discretion

Internal focus and integration

External focus and differentation

CLAN ADHOCRACY

HIERARCHY MARKET

Stability and control

ORGANIZATIONAL CULTURE OF THE

FUTURE

2006ORGANIZATIONAL

CULTURE

2008ORGANIZATIONAL

CULTURE

41

4.Hierarchy.Thistypeoforganizationisverystructuredandformalized.Proce-dures describe everything how employ-eescanandmustdothework.Leadersare thosewhocanorganize and coor-dinate activities well and ensure their efficiency.Themost important for theorganizationissmoothoperationalpro-cess. Organization members hold to-getherformalrulesandpolicies.Long-termbenefitsareassociatedwithstabil-ity,smoothandefficientoperation.Thesuccess is associated with a reliable supply of goods, clockwork schedules, low costs. Management of personnelmust ensure the safe management of organization’s resources and predict-abilityofemployees’behavior.the type of furniture manufactur-

ing company’s organizational culture in2006 according to K. S. Cameron and

R.E.Quinntypologycanbedescribedasthe “hierarchy” type (see Picture 4): or-ganization is notflexible, bureaucracy isdominating, only a small part of employ-ees take their own decisions and are en-couraged to show personal initiative, new ideas and innovation are not encouraged, work / tasks are based on the rules andprocedures, the power of the hierarchy is highlighted.

Aftertheorganizationalculturechangethetypeoforganizationalculturein2008can be described as a move towards “ad-hocracy” type (see Picture 4): the flex-ibility emerges in the organization,moreemployees are encouraged to show per-sonal initiative, to take risky decisions, the company focuses on the new ideas and innovation, encouraging employees’ creativity, reduces the power of hierarchy, the company CEo discusses the objec-

MAINTAIN

1. Attention to security high quality products2. Attention to new ideas and innovations3. Encouragement to work using less re-

sources4. Clarity and understandability of work tasks5. Collaboration of employees, sharing of

information and consulting6. Possibility to address arising questions to

direct manager7. Encouragement to raise qualification and

develop skills

DEVELOP

1. Introduction of company’s values and objectives to employees

2. Encouragement of employees to show personal initiative and to take decisions individually

3. Satisfaction and loyalty of employees4. Possibility to have a career5. Solution of conflicts by paying attention for

all interested sides

CHANGE

1. Weak communication in the company2. Little cooperation and no coordinated ac-

tion between separate departments3. Uncertainty of employees about their du-

ties and responsibilities4. Lack of motivational system for employees5. Lack of employees’ evaluation system

AVOID

1. Very strict and frequent control of employees

2. Denial and disregard of conflicts arising in the company

3. Spread of information through rumors

Picture 5. Matrix of furniture manufacturing company’s organizational culture management

42

tives and values not only with the heads of departments, but also with specialists and encourages them to search for solutions of thearisingproblems.

However, it is important to remember thekeyproblemsoforganizationalculturein2008aswell:communicationdisorders,the lack of cooperation between the depart-ments and the lack of personnel evaluation andmotivationsystem.

as can be seen from Picture 4 the type of organizational culture is “adhocracy”,butyetnotverydistinguished.Tobuildastrong organizational culture of “adhoc-racy”typeandthusachievethecompany’soperational efficiency, the managementmatrix of furniture manufacturing compa-ny’s organizational culture was designed(seePicture5).Thematrixpresentsimpor-tant characteristics of the organizationalculture that are divided into four groups:characteristics that must be maintained, changed,improvedandavoided.

Conclusions

after the comparative analysis of organi-zationalculturein2006andorganizationalculture in 2008 was carried out the conclu-sion that in the research period the organi-zationalculturechangesweretakingplacecanbemade.

the research has showed that the as-pectsoftheorganizationalculturechangeare internal organizational changes. Infurniture manufacturing company organi-zational culturewasmanagedbymakinguse of twomain methods: instillation oftechnology (accounting system Navision that is used in production instillation) and incorporation of the persons from outside intotheorganization(newCEO;newCEO

has changed the organizational structure,division managers and cut the number of employeesinthemanagementsystem).

taking into consideration the results of theresearchethetypeoftheorganizationalculture of furniture manufacturing com-pany in 2006 according K. S. CameronandR.E.Quinntypologycanbedescribedas“hierarchy”typeandtheorganizationalculture of 2008 as the movement towards “adhocracy”type.

Organizationalculturemanagementma-trix was introduced to create a strong orga-nizationalcultureof“adhocracy”typeinthecompany and in this way to make company’s workefficient.Thematrixcanbeadaptedtothe management of organizational cultureof those organizations that perform simi-lar studies of their organizational culture.Buildingupthematrixattentionshouldbepaid to thecharacteristicsof theorganiza-tional culture that are important for certain organizationsatthattime.Inordertoman-agetheorganizationalcultureinothercom-panies in the right direction,characteristics oftheorganizationalculturemustbeexam-inedanddividedintofourgroups:1. Strongsidesoftheorganizationalcul-

turethatthecompanyshouldmaintain.2. Weak sides of the organizational cul-

turethatthecompanyshouldchange.3. Theexistingsidesoftheorganization-

al culture that at present are not very strong and that should be improved, be-cause they have a great potential for the future.

4. Theexistingveryweaksidesoforgani-zationalculturethatshouldbeavoidedandnotstressed.It is also important to establish and en-

sure continuous monitoring of the organi-

43

zationalcultureinthecompanyinordertobe aware of the the characteristics of the organizational culture and monitor their

changes over time and thereby shift the managementoftheorganizationalcultureintherightdirection.

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