Culture, motivation, and organizational strucutre

A culture motivating continuous improvement

Value Chain Management – Aarhus

OCI – examination report

3rd of May 2016

Frederik Gylling – 189265

VIA University Collage

Culture and motivation in a production company - a ## case study

The Bachelor Degree in

Value Chain Management

VIA University Collage

Authors: Frederik Gylling.

Assignment: Examination report

Supervisors: Henrik Richardy Christensen

Characters: 24 942

Submitted: 3rd of May 2016

Table of content

1 Introduction ............................................................................................................................................... 1

1.1 Problem formulation ......................................................................................................................... 1

2 Culture as a leadership motivation tool .................................................................................................. 2

2.1 The individual’s motivational dimensions ....................................................................................... 2

Personal motivators .................................................................................................................. 2 2.1.1

Contextual motivators .............................................................................................................. 3 2.1.2

The pyramid of contextual motivators ..................................................................................... 3 2.1.3

2.2 Holistic understanding of motivation .............................................................................................. 4

3 Leadership interventions on culture ....................................................................................................... 5

3.1 Paradigms view on OC ...................................................................................................................... 5

3.2 CEO’s approach to influence culture ............................................................................................... 6

4 Aligning strategic and employee goals .................................................................................................... 7

4.1 Theoretical approaches to continuous improvements ................................................................... 7

4.2 Employee-driven improvements ...................................................................................................... 7

4.3 Subgoal for subsystem ..................................................................................................................... 8

5 Conclusion ................................................................................................................................................. 9

5.1 Reflection and further research....................................................................................................... 9

References ...................................................................................................................................................... 10

List of figures and tables:

Figure 1: Individual motivational factors. Inspired by Lægaard. (Self-made). .............................................. 2

Figure 2: Pyramid of contextual motivators. (Self-made). .............................................................................. 4

Figure 3: CEO’s influence on motivation. (Self-made). ................................................................................... 4

Figure 4: Elements of culture. Inspired by Schein and Martin. (Self-made). ................................................ 5

Figure 5: Intervention influence on ##. (Self-made). ..................................................................................... 6

Executive summary:

####### has gradually lost their competitive advantages in the later years due to increasing external

competition and a lack of internal development. A new CEO is hired to change the existing conservative

culture into proactive kaizen. The CEO believes in the importance of employees contributing to

continuous improvements on different levels within ##.

The purpose is an explanatory discussion of how CEO interventions can create an organizational culture

motivating the employees to kaizen.

The organizational motivators are found to be the direct influence sphere of the CEO. Additionally, he

has indirect influence on the other social systems within the organization. His direct influence is

organized into 4 motivators – fundamental, content, process, and context.

The direct influence sphere is on the visual structure, form and artifacts of an organization’s culture.

The CEO should apply the 4 motivator tools according to the personal desires of the cultural system and

align it with his strategic goals to create internal integration. Furthermore, it is important to understand

the ambiguous nature of culture, i.e. that cultures are interdependent and many other factors influence.

The CEO should use his influence to create a motivational structure and form. The fundamental

motivators should be in place to remove dissatisfaction. The next step is to conditioning the desired

effort and performance by content motivators, to motivate the process of continuous improving by

process motivators, and to show people that improving make a difference by using context motivators.

Improvements are to learn from you action and use that learning to improve the next action. However,

there are more levels of learning. It is important to create a structure where the right learning process is

emphasized at the right level, so that the learnings can lead to improvements. In production it is

important to learn to improve the performance of a task. However, at the tactical and strategical level

more advanced loop-learning is needed to rethink strategic direction and how the company is acting.

OCI – Examination Report – Frederik Gylling

Page 1 of 10

1 Introduction

This report is a discussion of organizational culture (OC) motivating continuous improvements. Majorly,

it will be a critical realism explanation of the underlying structures of motivation, but in order to make

theory action-oriented, ###### (##) is used as case company and will be the reference frame.

## is a family owned production company. ##’s critical success factor is identified as “adding value by

being local” - with competitive advantages of flexible, collaborative and quality. ## has grown in size

and complexity over the past years and the owner’s faced leadership difficulties in adapting to these

changes internally. Additionally, the market has become increasingly competitive. The culture and

leadership was stagnant and conservative and they lost gradually their competitive advantage and

profitability. 60-70% of the employees are within production. Generally, the employees have worked at

## for several decades and are experts on their field. ## had the foundation for success, but did not

perform accordingly. A CEO was hired to retain ##’s competitiveness, profitability, and do it sustainable.

In the fast developing competitive context, the CEO knew that sustaining the success was to

continuously improve the organization. His vision was to change the culture into an employee-driven

kaizen. The CEO had little insights to ##, hence was dependent on the employees in order to succeed.

The CEO’s interventions on the culture influenced all employees and had great impact on the entire

company; hence exemplifies well the process from a reactive to a proactive OC.

1.1 Problem formulation

The purpose of this report is to discuss how leadership interventions can create employee-driven

continuous improvements at ##.

The discussed interventions are based on the problem of how to create an OC by leadership

interventions, which motivate employee-driven contribution to continuous improvement at ##?

1. How is culture a motivational leadership tool?

a. What are the dimensions of motivation?

b. How can the CEO influence employee’s motivation?

2. How did the CEO influence ##’s OC?

a. What are the perspectives on culture?

b. What was the CEO’s intervention approach to ##’s culture and subculture?

3. How can a motivating OC be aligned with the CEO’s strategic goal of continuous improvements?

a. How can continuous improvements be employee-driven?

b. How can the goal be broken-down in ##’s organization?

The main theoretical paradigm of the report is Schein’s concept of image and the internal integration.

The complexity of individual’s identity and perception will only slightly be discussed. Furthermore,

external adaption is delimited out of the report. The Report focuses on the CEO’s interventions. It will

delimit external factors and individual employees’ intervention. All data about ## is gathered with a field

research and based on subjective participant observation, thus the quality of data is not reliable,

consistent, internal - nor external valid in an empirical sense. The logical reasoning for the application of

the theory is based on an abductive approach and seeks to find the best and simplest mechanism and

structures to understand the reality.


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2 Culture as a leadership motivation tool

This section will begin the report with a perspective on individual employee motivation. It will propose a self-made

holistic framework of motivators and relate it to leadership intervention direct and indirect influence sphere.

2.1 The individual’s motivational dimensions

Motivation is a personal specific topic influenced by many internal and external factors. Research

argues a correlation between individual motivation and individual performance (Lægaard, 2006). Each

individual’s performance is what accumulates into an organization’s performance. The success of an

organization is a factor of many variables; one is each individual’s performance. Thus, a deeper

understanding of motivation as an isolated topic, create a sound foundation for the rest of this report.

Figure 1 visualizes a simplified reference frame divided into personal and contextual motivators. This is

one way of organizing motivators, other researchers fancy to distinguish based on content and process

(IMA, 2015) and others based on inner and outer factors (Lægaard, 2006).

Figure 1: Individual motivational factors. Inspired by Lægaard. (Self-made).

Personal motivators 2.1.1

Most of these motivators are interrelated with the personality and life-experiences. They are less

environment dependent, thus leadership interventions have no direct influence. Some are conscious,

but typically they are tacit assumption, biased, unconscious values etc. For the CEO to deliberately

create motivated employees, he should gain insights to personal motivators and seek to align the

organizational motivators accordingly. Many researches focus on the personal motivators, but there are

limited empirical-proven universal laws. Autonomy, mastery, and purpose are momently broadly

referenced as fundamental work-related motivators (Pink, 2010).

Personality and need

Maslow contributes to the foundation of needs with his hierarchy theory. The theory is modified into a

business context – where the 5 levels reflect the organizational motivators. Later Alderfer expanded on

the idea by simplifying the 5 levels into 3 – existence, relatedness, and growth. Alderfer argued that a

tension on one unfulfilled need can cause “progressive frustration”, which is an overstimulation of a

lower need to compensate. McClelland thought of needs in a social perspective, with the same basic

idea, but as being influenced by the contextual motivators. He was interested in how to lead the

organization based on the employees’ need-structure (Lægaard, 2006). Need theories are

simplifications of a complex topic - each individual has a unique structure. These motivators are mostly

intangible and are difficult to assess. The personality can be observed and the CEO can ask to the

conscious needs, but the real motivators might be intimate, unconscious, and complexly interrelated.

They can masquerade in different behaviors, tensions and values. Consultation and personality


Page 3 of 10

assessment can be helpful tools for the CEO to gain insights to implicit motivators, it is often costly

knowle##e, but can in some cases be of even higher value.

Goal and expectation

In order to make personality and needs more universal and tangible, goal setting and expectation

assessment can be helpful tools. Actions are mostly based on an expected outcome to achieve a goal

based on a need or a personal desire. Often it is implicit and unconscious reasoning. However, it is

general easier to assess the reasoning behind done and planned action than assessing personality and

needs. It is valuable insights for the CEO to understand his employees.

Various expectancy - and equity theories create frameworks of relative expectations – e.g. relative to

probability of success and value of reward, to demands and effort, and to a “relevant other” (Lægaard,

2006). Goal setting techniques create a framework and a terminology to formulating personal and

personnel goals. E.g. can SMART-theory be a framework for the CEO to assess an employee’s goals. The

degree of motivation toward a goal can be assessed according to persistence, direction, and intensity

(Lægaard, 2006).

Contextual motivators 2.1.2

Within social systems there are structures that influence the personal motivation of the individual.

These can range from conscious formal artifacts to unconscious informal structures. This report

distinguishes between the organizational motivators, which are the CEO’s tool to motivate the

employees, and the other contextual motivators that are out of the CEO’s direct influence sphere.

External environment motivators

These motivators are based on a systematic thinking of the individual. Employees are part of other

social systems – e.g. sports clubs – and subsystems – e.g. work teams, interest group at work etc. An

individual’s degree of motivation in one system is influenced by the other systems. This holistic view will

be further elaborate onwards in this report. The categories of the pyramid also apply for these social

systems, but they are typically unconscious structures rather than used as leadership tools.

Organizational Motivators

To motivate the CEO must align the organizational motivators with the personal motivators of the

individual. However, most importantly the CEO must channel the motivation toward his vision of

employee-driven continuous improvements.

The pyramid of contextual motivators 2.1.3

Fundamental motivators are concerned with the basic foundation for motivation. This is related to the

employee’s basic need - e.g. Herzberg’s dimension of Hygiene contributes to this. Rather than

motivating, properly managed these factors simply avoid dissatisfaction. Some hygiene factors are

salary, job security, personnel policies etc. (Lægaard, 2006). It is the basic job design and - architecture

(Deloitte, 2015). Expectations to basic need various from individuals - e.g. salary may be a content

motivator for one, for others it may be a fundamental motivator – however it might be a progressive

frustration for an unfulfilled lower need.

Content motivators are various kind of rewards based on result of a performance. This can be the

traditional operant conditioning - often referring to Skinner’s reinforcement theory. It is roughly to

appreciate good performance and avoid bad performance. The CEO should make these transparent and

influential (dis-/attractive), but without making it too complex and bureaucratic.


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Figure 2: Pyramid of contextual motivators. (Self-made).

Process motivators concern working process rather than the content outcome. It is related to mastery,

learning, autonomy, responsibility, feedback, and advanced job design. These are referred to as the

“drivers” by Pink or the Core Job Dimensions by Hackman and Oldham. According to Hackman and

Oldham these motivators determine quality, motivation, satisfaction, and low absence (Lægaard,

2006). By redesigning the organizational structure and form, the CEO has direct influence on the

working process. Feedback systems and learning loops are important parameters.

Context motivators are the human desire to contribute to something beyond themselves. It is purpose,

social justice, team-work etc. It is complex and perceptual, but is motivating many individuals. Various

theories mention this motivator, but few categorize it solely. ## is a for-profit organization, and the

product is not obviously contributing to a higher purpose. However, to feel helpful towards customers,

colleagues, and suppliers – stakeholders - can be a motivator. The CEO might overlook these motivators

and consider them resource waste. Understanding these motivators for the individual help to managed

them properly – i.e. make them motivate value adding product innovations that benefit customers or

new production techniques helping fellow colleagues. Continuous improvements must benefit critical

stakeholders of the person contributing – i.e. if colleagues are fired due to an employer-driven

improvement the employees will avoid or sabotage improvements.

2.2 Holistic understanding of motivation

Personal motivator

Org. motivator

Other systems

Other systems

EmployeeMotivation

The CEO’s leadership

intervention

Figure 3: CEO’s influence on motivation. (Self-made).

Concluding this section, an employee’s degree of motivation is understood as the individual’s personal

– and contextual motivators, both interrelated and interdependent. The contextual motivators are all

systems the employee is a part of; one of them is ## – this system can be influenced by the CEO’s

contextual motivator tools visualized in the pyramid.


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3 Leadership interventions on culture

Following section 2’s concept of motivation, this section will focus on ##’s culture. Firstly, different culture

paradigms will be elaborated; followed by an analysis of the CEO’s interventions on ##’s culture.

3.1 Paradigms view on OC

Culture generates commitment, increases productivity, and perpetuates personal values (Martin,

1992). “Once culture is established and accepted, they become a strong leadership tool to

communicate the leader’s beliefs and values to organizational members ... they become successful in

maintaining organizational growth, the good services demanded by the society, the ability to address

problems before they become disasters and consequently are competitive against rivals.” (Schein,

2007).

Despite the general recognition of OC as vital for success, paradigms perceive it differently. Roughly OC

theory can be split into 3 paradigms (Martin, 1992):

Integration: A popular, simple view, which empowers the leadership as the creator – culture

is a tool - a top-down philosophy. Culture is something we have. (Schein).

Differentiation: Coexisting, interrelated, overlapping, nested subcultures – the culture is the

interdependency, which is either harmonized, conflicting, or indifferent.

Fragmentation: Ambiguous, intangible - a complex view on the system and sub-systems. The

power is diffused at all hierarchical levels. Culture is something we are. (Martin).

The two main conflicting paradigms are integration and fragmentation – does the leader have the

power or is the power diffused. Schein understand culture as 3 levels of artifacts, values, and tacit

assumptions (Lægaard, 2006). Martin does as informal, formal, and values (Martin, 1992). Artifacts,

informal, and formal are the visible systems within a culture. Related to the contextual motivators, an

individual are part of several social systems, following Martin’s paradigm, each system are a culture.

The contextual motivators are in this report understood as a system’s visible culture, which are

influenced and influences the invisible culture that is close related to the personal motivators. As figure

3 shows, the CEO has direct influence on the visible culture of the organization, hence indirect influence

on the organization’s invisible culture, each subsystem’s culture and on the each’s personal motivators.

On the other hand the organizational culture is influenced by other system’s culture and thus ultimately

by each individual. Figure 4 indicates the CEO’s influence sphere.

Figure 4: Elements of culture. Inspired by Schein and Martin. (Self-made).

Visible

Invisib

le


Page 6 of 10

3.2 CEO’s approach to influence culture

The CEO used his influence to change the culture directly and indirectly. He established formal practices

e.g. by appointing department coordinators and creating a cross-functional core team of the

coordinators, the production manager and himself. Additionally, he promoted informal rituals at

meetings and created stories out of successful changes and improvements.

In contrast to traditions of a functional structure, the cross-functional team tended to a matrix organized

structure with competences and knowle##e from all functions. The new team changed the mechanical

traditions into an organic form – i.e. it created a plenum for orientation and coordination of horizontal

knowle##e-sharing and specializations was used to solve the common tasks within the team. The

change was inspired by the “Leading Change - 8-step model” (Kotter, 2012) , which emphasize the

importance of forming a coalition.

This had a large contextual motivation effect on the core, which was involved and responsible through

their commitment in the team. The fundamental and content motivators did not change much, but the

process and context changed by the new sense of urgency, thus work processes were now towards a

common goal of retaining the competitiveness. However, outside the team the structure became more

hierarchical. The appointment of coordinators increased the mechanical form in the production – i.e.

rights and obligations were decreased to specific tasks, the coordinators had the control, and

information was centralized at the core team. The CEO’s intervention had large indirect influence on

these subsystems, whereas each worker previously had been equal, the appointment resulted in a

formal distance. It had contextual disadvantage in sometimes conflicting goals from the CEO and from

the workers, which the coordinator was in the middle of and naturally influenced by. On the other hand,

it had the advantage of increasing the CEO’s influence reaching further out into each subsystem.

The CEO knew he could not change the whole culture at once and there would naturally be some

reluctance in-process. He worked within the office and closely with the reception; hence the feedback

from these subsystems was relatively accessible and he could act fast to reluctance. Additionally, he

identified low risk of such due to a general sense of urgency for change. However, in the production

department the sense of urgency was low and the reluctance to change was generally high. The team of

coordinators was a vital coalition for accessing feedback from the production workers and influencing

the subsystems culture to be less reluctant and increasingly sense the urgency. As well it was a channel

to promote the successes of the changes made. Figure 5 visualizes the cultural influence of the change.

Figure 5: Intervention influence on ##. (Self-made).


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4 Aligning strategic and employee goals

Closing this report, this section will combine the concepts from previous sections and suggest approaches to

create a motivational culture for employee-driven continuous improvements aligned with the strategic goal of ##.

4.1 Theoretical approaches to continuous improvements

Continuous improvements are neither a goal nor a destiny, rather a culture or philosophy. Kaizen is a

philosophy of a circular process of improvements across the system (Norman, 2010). The Deming Cycle

is a popular tool, with the circular plan, do, check, and adjust stages. OEMS, LEAN, SCOR etc. all

emphasize running the improvement process in a circular manner. Kotter’s “leading change” is a

prescriptive approach originally designed for “… episodic change in rigid, finite, and sequential ways”.

The updated “Accelerate’s 8-step process” is designed to “Run the steps concurrently and

continuously” (Kotter, 2015) and is thus an emergent approach among others like Lewis, who presents

a communicative and continuous culture change alternative (Lewis, 2011). Continuous improvement is

recognition of “Successful organizations cannot remain static if they hope to continue that success;

they must change in order to keep up with a changing world.” (Spector, 2013).

4.2 Employee-driven improvements

To create the contextual motivators and indirectly influence subsystems to motivate kaizen is a

strategic task, to understand the personal motivators and appreciations is critical for success. The CEO

has roughly 3 influence parameters for changing the employee’s motivation: the content -, process -,

and context motivators.

As content motivator the CEO could conditioning Kaizen by rewards on effort and performance.

E.g. giving bonuses to “relevant others” who do the desired effort on improving. Additionally, he

could assign specific improvement tasks with tangible KPIs, and transparently reward based on

performance. The CEO must assess what rewards impact the subsystems i.e. do money bonus

impact the production staff or reception, or would other rewards be more appropriate.

As process motivators the CEO could seek employee involvement by changing the power

structure to create task autonomy further down the hierarchy, by creating an organic

decentralized approach to information sharing, and a cross-functional approach to employee’s

skills mastery and development. He could design cross-level deliberate feedback and relevant

learning loops. This might become relevant as kaizen increasingly becomes a value and tacit

assumption within ##’s culture. Firstly, it is important to use process motivators to motivate the

coalition and the core team.

As context motivators the CEO could emphasize the organizations social benefits of

improvements, by making it transparent who and how the improvements impact and who

initiated and performed them. He could formally promote employees who put effort into

improvements, thus seek to increase their influence on the subcultures. These motivators are

difficult to manage. However, they may have a large impact on the culture change. If

subcultures are negative towards change, employees with improvement ideas may not initiate

them due to social ju##ements from the subsystem, even though the other motivators are

optimal. Changes have to become desirable and beneficial for the employees, thus contributing

is beneficial for the system and has a social reward.


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4.3 Subgoal for subsystem

Kaizen is a company-wide philosophy, but the scope for different leveled employees should vary and so

should the motivators. Just as the probability of success varies from individuals, the goals and demands

for different subsystems should. The functional and mechanical approach the CEO has to the

production will typically promote single-loop learning, with a narrowed specific task focus. Woodward

pessimistically outlined the dangers of this rather Fordism approach (Lægaard, 2006). However, the

workers may not be personal motivated by higher contextual motivators. The CEO must understand the

subcultures and align the contextual motivation accordingly. Too much involvement and advanced loop-

learning may even be an obstacle for the line-staff to perform the task needed (Tosey, et al., 2012). The

primarily activity are fundamentally the survival factor of the company, thus continuous improvements

should enhance these activities, not move the focus away from them. In the core change team the

organization might benefit from motivating double-loop or even triple-loop learning in order to

accumulate shared knowle##e and create innovative improvement solutions (Tosey, et al., 2012). Loop-

learning is dependent on motivation, but is part of tacit assumptions and values for the individual,

hence a change in the deeper level of culture rather than the direct influential structures and artifacts.


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5 Conclusion

Initiating the report, the two main employee motivational dimensions were explained and it was further

specified on which motivators the CEO have direct and indirect influence. Elaborating further on ##’s

culture, 3 different perspectives on culture were presented and were used in a further analysis of how

the CEO had influenced ##’s culture and subsystems. Finally recommendations were elaborated on how

to motivate employee-driven continuous improvements and how to differentiate on subsystem-specific

goals.

5.1 Reflection and further research

In order to create a concise and comprehensive report, delimitations have been needed. Other relevant

theory, analysis and discussions are due to the limited scope down-prioritized. The purpose of the report

is to illustrate some of the most vital perspectives and theories on the subject, and present it in an

innovative and holistic way. Individual perception and personality of the employees have largely been

neglected throughout the report, but could lay the foundation for a social constructivist evaluation.

Reflecting on the report, some interesting alternative routes have come to mind. Some of them are

mentioned below:

How are the external cultures and subcultures influencing the employee motivation?

How will a complete organic and matrix approach affect ## on a long-term?

How has the cultural change project been planned and executed? How has it affected the

result?

How has the cultural change approached environmental sustainable continuous improvements?


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Leadership & Management

Culture, motivation, and organizational strucutre