Chapter 12 Organisational culture pg 299-317Dimensions and types of organisational culture

Schein’s levels of culture are categorised by their visibility.

Behaviours and artefacts. These are the most visible signs of culture and include:

1. symbols including status symbols, such as company cars and reserved parking places, artefacts such as the organisation’s logo, the architecture and interior design, the technology used

2. the stories and myths that circulate and the jargon and humour used

3. rituals such as the office party .4. non-verbal behaviours such as greetings,

gestures, dress code. Espoused beliefs and values. These are less visible than behaviours and artefacts. Beliefs are propositions for which we often have no evidence but which shape our perceptions.. Organisational or collective beliefs and values often reflect the beliefs and values of leaders. Underlying assumptions. These are taken-for-granted truths and are not visible, even to ourselves unless we think carefully about them. Leaders and managers who believe the answer to improving performance is to offer a pay increase are probably making an assumption that people are mainly motivated by money. There may be an assumption that all employees can improve their performance, given support and time, or conversely, that it is difficult for people to change. Staff will make this assumption, too.

Research by Hofstede (2001), for example, suggests that organisational cultures can be better defined

by practices than by values. This is because values tend to be shaped early in life by family culture long before a person joins an organisation. Nonetheless, organisational values are likely to be expressed in organisational practice.

Taxonomies of cultureDeal and Kennedy consider two dimensions: the speed of feedback on performance and reward, and the degree of risk or uncertainty over outcomes. They identified four types of organisational culture placed on a matrix according to these two dimensions

The tough-guy macho culture. This culture is typified by fast feedback and reward and high risk. Organisational examples include brokerages operating in financial markets, venture capitalists, media and publishing, management consultancy. Employee stress may result from the degree of risk. Characteristics include a short-term orientation, little learning from setbacks, and distrust among colleagues.

The work-hard/play-hard culture. This culture is typified by fast feedback and reward and low risk. Organisational examples include property and car

sales and computer/IT companies. Employee stress may result from the speed and quantity of work rather than uncertainty. Characteristics include an orientation towards action, reward for persistence, the sacrifice of quality for quantity, little long-term planning, a focus on clients or customers, and a lack of thought and attention.

Process culture. This culture is typified by slow feedback and reward and low risk. In an organisation with this culture, there is often a focus on the way things are done. Examples include insurance companies, banks, heavily regulated industries and public sector bureaucracies such as local government. Employee stress may result from frustrations with systems and internal politics. Characteristics include use of jargon, orderly and punctual behaviour, attention to detail, and caution and protectiveness which are responses to absence of feedback.

Bet-your-company culture. This culture is typified by slow feedback and reward and high risk. In organisations with this culture timescales are long and there is emphasis on preparation and planning. Organisational examples include biotech and pharmaceuticals companies and others involved in science and technology. Employee stress results from the level of risk and the long delay in feedback. Characteristics include respect for authority and technical competence, slowness, consultative by top–down decision making, vulnerability to short-term fluctuations and cash-flow problems.

These four types are set out below, together with the organisational structures with which they tend

to be associated. Structure refers to how responsibilities for different functions and processes are divided up between different departments, work groups and individuals

Power culture. This concentrates power at the centre, like a spider in the centre of a spider’s web. The organisation exists to enable the decisions of those at the centre to be carried out. It is often a very personal culture in the sense that communication is between individuals rather than between formal job holders or departments. Often dominated by a charismatic leader or founder, the culture relies on individual responses and interpersonal commitments.

Task culture. This culture has a job or task orientation and can be thought of as a matrix or net. Much power and influence lies at the intersections of the strings in the net. Employees typically belong to different teams for different purposes.

Person culture. In power and task cultures the purpose of the organisation takes priority. In contrast, a person culture puts individuals and their interests first: the organisation is a resource to use to enhance their talents and abilities. This culture can be thought of as a constellation or cluster of stars. Cooperatives of artists, academic think-tanks or consulting partnerships may possess a person culture in which people are motivated by their own personal and professional values.

Role culture. This type of culture is quite the opposite of person culture. Individuals have roles to play and communication tends to be formalised into systems and procedures, both horizontally and vertically within the organisation. It can be thought of as a Palladian-style building as the diagram shows. An organisation possessing this culture is more likely to be managed than led. Certainty, predictability, continuity and stability are highly-regarded in such a culture and professionalism and reliability are valued above independence and initiative-taking.

Ideal or ‘above-the-norm’ cultures

Quality, safety or security cultures can be thought of as ‘above-the-norm’. The terms ‘quality’, ‘safety’ and ‘security’ can mean simply the degree to which something consistently meets requirements, set by the organisation or by law – or much moreIn general the introduction of quality standards requires training, team building, changes in work patterns and cultural change.

The ISO 9000 quality management standard is based on eight management principles: customer focus leadership involvement of people process approach systems approach to management continuous improvement factual approach to decision-making mutually-beneficial supplier relationships.

The steps an organisation needs to take are to: . define why it exists determine key processes establish how these processes work within the

organisation determine who owns these processes agree these processes throughout the

organisation.Total Quality management disadvantages:1. getting too close to customers2. increasing customers control over staff3. Exploiting staff4. Blocking more radical improvements5. Quality as a fad

6. Cost Psychological climate & what managers can doThere appear to be eight broad factors that make the most important contributions: (Source: adapted from Koys and De Cotiis, 1991)

1. Autonomy. This refers to the degree to which people are able to take individual responsibility,

2. Cohesion. This describes peer relations, cooperation, friendliness and lack of conflict and status differences.

3. Trust. This involves trust in leaders and the sensitivity of managers, openness and intimacy as opposed to aloofness.

4. Pressure. This describes the general pressure of the job, role overload and conflict, role ambiguity, the job standards required and the measurement of results.

5. Support. This refers to general support for an employee, the consideration of the leader and how the leader facilitates the work.

6. Recognition. This describes recognition and feedback, opportunities for growth and advancement, rewards (and punishments).

7. Fairness. This relates to fairness and objectivity in the reward system, clarity over promotion, clarity of policies and the efficiency of the organisational structures.

8. Innovation. This refers to organisational flexibility as well as innovation, challenge, degrees of risk and security and orientation to the future.

These dimensions, drawn from a content study of organisational climate surveys, seem to be standing the test of time. A decade after Koys and De Cotiis,

Davidson et al. (2001) identified the dimensions as: .

1. leadership 2. facilitation and support3. professional and organisational esprit 4. conflict and ambiguity 5. regulations .6. organisation and pressure .7. job variety8. challenge 9. autonomy .10. work-group cooperation .11. friendliness and warmth12. job standards.

Chapter 13 The organisation and the external environment pg 323-335

The internal environment comprises the organisation itself, its staff, resources and facilities. The internal environment is said to be one that managers can control, but, of course, not all managers have control over all aspects of the internal environment, and many aspects of the internal environment are actually rather difficult to change. The near external environment includes customers, clients, contractors, suppliers and competitors, as well as intermediaries and other identifiable stakeholders. These cannot be controlled by managers but they may be influenced to some extent. They certainly often have the ability to influence the organisation and then its managers. The far external environment refers to factors that can be neither controlled nor easily influenced from within an organisation. These are often referred to by the acronym STEEP, which stands for social, technological, economic, environmental and political factors. (There are some other acronyms

for these factors. It does not really matter which one you use as long as it helps you to remember what the factors are.)Organisational boundaries not fixedOrganisational boundaries are not fixed. They can change in response to factors in the far external environment. Examples include: political and economic pressures that result in organisations in the public sector using outside contractors . competitive pressure which may result in the need to reduce costs and a decision to outsource an activity because it is cost-effective to do so. technological improvements that allow an organisation to do something more cheaply that was previously outsourced to another organisation.

Organisational boundaries may also change because something has changed in the near external environment (for example, a contractor has gone out of business) or because of a change in the internal environment (for example, a change of strategic direction within the organisation itself).

Often, in addition to not being fixed, organisational boundaries are not clearly defined. Sometimes it is not very easy to tell whether someone is a member of a particular organisation. For example, many business and management consultants work almost entirely with just one organisation and the organisation relies on their work as much as it does on that of the managers it employs. While the consultant is not technically an employee of the organisation, their function in that organisation may not be very different from that of a manager who is employed directly by the organisation.

Stakeholders and their interestsStakeholders have been defined as follows: ‘A stakeholder in an organisation is … any group or individual who can affect, or is affected by, the achievement of the organisation’s objectives’ (Freeman, 1984)

Understanding the external environment

We consider five categories: sociological, technological, economic, environmental and political factors, known as the STEEP factors.

Sociological factors Many of us live in a way quite different from that of our parents; the world in which our children will live and work as adults will be different again. These differences are due to demographic changes, patterns of work, household structure, patterns of

consumption and gender roles. These sociological factors affect organisations too.

Demographic changes

Patterns of work

Household structure

Pattern of consumption

Gender roles

Technological factors Few people’s lives have not been affected by information technology (IT) which has changed forever the structure and nature of work. Rather than try to predict where IT will take us, it is more useful to focus on the process of technological change and its implications.

Economic factors The economic environment affects organisations in a number of ways. The main economic factors are: .

the rate of economic growth interest rates (the cost of borrowing money) inflation (increase in prices for the same goods

and services) energy prices currency exchange rates unemployment

Environment factors

Legislation. Information. Employees. Shareholders Pressure groups. Customers.

Political factors

If you work in the public services or the voluntary sector you will be aware of the political influences on your work. Commercial organisations, too, are powerfully influenced by political factors. This is because legislation affects most aspects of organisational life. Health and safety at work, equal opportunities and employee protection are three major examples of European law. Since the Treaty on European Union of 1992 (the Maastricht Treaty), regulations are applied across Europe in areas such as working hours and minimum wages.

Trading relationships are strongly influenced by political factors. The EU is an obvious example, but the World Trade Agreement is also of major importance. Embargoes on trade for political reasons can also have a commercial impact.

Assessing the impact of STEEP factors

Chapter 14 Managing change p341 to 367

the coordination of a structured period of transition from situation A to situation B in order to achieve lasting change within an organisation. (Source: BNET UK, 2009)

The good idea that did not work

The main problems associated with any change a manager might make:

people may not see the need for it or may think the reason is mistaken

it may threaten practices that people value . it may have unintended consequences . it may threaten the interests of some staff . whilst some people greet change with

enthusiasm others dislike it.

Attitudes towards change: As managers, our attitudes towards change will be influenced by the role we play. Kanter et al. (1992) identify three different ones: .

change strategists or initiators who initiate and set the direction of change

change implementers who are responsible for the coordination and implementation of the change

change recipients who are strongly affected by the change and its implementation.

Planned and emergent approaches to change: Bullock and Batten (1985) developed the four-phase planned model set out below.

1. Exploration phase. Exploration determines whether a change is needed. If it is, the necessary resources need to be put in place.

2. Planning phase. This stage involves the collection and interpretation of information to understand what the problem is, developing objectives for the change and deciding on the approach to be taken to achieve them. Key stakeholders are identified and involved.

3. Action phase. This is the implementation phase. Monitoring should take place and any necessary adjustments should be made to the approach to change, the activities or the objectives.

4. Integration phase. At this point the change becomes fully-integrated and embedded. Evaluation should take place to assess the effectiveness of the change.

Those who support the emergent approach reject the idea of rules for change. However, they focus on five areas that help or hinder the change process. These are:

1. Organisational structure – flatter structures encourage delegation and increase the likelihood of change taking place at all levels. Organisational culture – a ‘culture of change’ means that change becomes an accepted way of doing things (Clarke, 1994).

2. Organisational learning – employees’ learning creates pressure on managers to make changes.

3. Managerial behaviour – managers need to move away from directing change to leading, facilitating and coaching.

4. Power and politics – the emergent approach stresses the need for power and politics to be managed if change is to be successful.

The feasibility of change

Scope

Assessing the prospects: force-field analysis

Operational strategies

There are five classic operational strategies, distinguished by the degree to which a change is imposed on the recipients (Thurley and Wirdenius, 1973).

Directive strategies: management’s right to manage change. Here, managers use their authority to impose a change and involve other people very little. The advantage of a directive strategy is that a change can be carried out quickly. The main disadvantage is that it does not take any account of the views of those affected by the change.

Expert strategies: management of change as technical problem-solving. This strategy is often adopted when a change results from a technical problem that requires solution by experts, such as

the introduction of a new information system. A special project team – often with a strong lead from management – is likely to implement the change, typically without much involvement of those likely to be affected by it.

Negotiating strategies: bargaining about change. This strategy involves a willingness to negotiate with other groups and to accept that adjustments and concessions may be needed. The adoption of this strategy does not remove a manager’s responsibility for initiating and directing the change. However, it acknowledges that those who will be affected by the change should have some say in the change.

Educative strategies: managing change by winning hearts and minds. This strategy involves changing people’s attitudes (beliefs, feelings and values and dispositions to act in certain ways) so that they support the change and are committed to it. The emphasis is on winning over staff through persuasion, education and training.

Participative strategies: we are all involved in making the change. This strategy involves those affected by the change process. Although change may be initiated by managers, the individuals and groups implementing it or affected by it will have a say in the form and direction of the change.

Factors affecting the choice of strategy Eight steps of change

Reasons by people resist change