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Culture and Innovation in Organizations

Abstract:

This essay provided a critical review of the theories of organizational culture. The review section began by analyzing and comparing key definitions of organizational culture. The assignment gave a brief description of different organizational culture theories and models by various scholars. The theories validity was tested and a comparison was made between different theories where applicable. The assignment, then, made the connection between organizational culture and innovation. I argued that innovation is strongly impacted by the type of organizational culture. In this section, the organizational culture models that encourage innovation were highlighted and explained. The literature review section was concluded by examining the leadership role in shaping and changing culture. While focusing on not-for-profit organizations, corporate cultures were also examined and examples from for-profit companies were highlighted.

The assignment then examined how culture influenced behaviors related to innovation and change in an organization that I worked for. This case study made the connections between different stages of the organization lifecycles and some of the theories. The case study gave a clear example of the culture impact on employees’ behavior. And how the innovative organization was change as a result of culture change. The essay concluded by recommending a strategy and action plan for the leader in the case study on how to enhance the organization culture.

1. A Critical Literature Review: Organizational Culture Theories, it’s impact on Innovation and How it is affected by the Organization Leadership:                                                                                                   

Background:

The organizational culture concept is relatively new. It was introduced by Andrew Pettigrew in the late 1970s through his article “On Studying Organizational Culture”. Pettigrew associates the creation of an organization culture with the vision of the founder and links the culture of an organization with its birth. Pettigrew describes organizational culture as the publicly and widely accepted meaning of systems. Pettigrew (1979). The concept of organizational culture thereafter attracted significant attention by scholars and practitioners alike. Organizations were given an additional aspect or character. That is organizational culture. It has been described by some researchers as shared values, norms or beliefs. During the early years of shaping the concept, scholars suggested that organizational culture is something that is unknown or neglected by managers. They further argued that organizational culture has direct impact on the success of an organization. Hence, organization leaders need to pay more attention to this concept. Following Pettigrew, Hofstede examined the applicability of American corporate culture abroad. Deal and Kennedy, Charles Handy, Schein, Cameron and Quinn and other scholars added significant contribution to the concept in the following years.

This section will examine the difference between various definitions of organizational culture. It will then review, compare and criticize the organizational culture theories introduced by the scholars mentioned.  The section will subsequently, study the connections between organizational culture and innovation. Finally, the organization leadership impact on the culture will be tested.

Organizational Culture Definitions:

Notwithstanding its direct connection to success, organizational culture has no one definition. On his paper, Defining “Culture” and “Organizational Culture”: From Anthropology to the Office, Bruce Tharp writes “Definitions of “organizational culture” are almost as numerous as those of “culture”— a 1998 study identified 54 different definitions within the academic literature between 1960 and 1993”. Tharp (2009).

Tharp elaborates on the variation of organizational culture “For some, culture is considered the “glue” that holds an organization together and for others, the “compass” that provides directions” Tharp (2009). In my view, both the “glue” and the “compass” should be combined for a better understanding of organizational culture. When combined, it reflects that organizational culture bring employees together and direct them jointly toward the common goal.

The shortest, most popular and often cited definition was coined by Marvin Bower; a legendary business figure who served as McKinsey and Company’s managing director for many years; and barrowed by Deal and Kennedy. The definition states that organizational culture is “The way we do things around here” Bower (1966). This definition is simple and precise. Perhaps It’s popular because organizational culture is a complex concept, it is hard to describe and impossible to measure. Some of the ‘things’ done in a workplace include how people express their feelings, how they dress, nonverbal communications, etc. Bower definition is useful, popular and it gives a broad understanding of organizational culture. Though, it doesn’t go deep into explaining how “the way things are done” in a workplace came about, why it is common an accepted by the members of the organization or what the “things” are.

As organizational culture definitions evolved over time with no commonly agreed definition in the field, the ingredients of organizational culture also varied. Handy attempts to outline the aspects that represents organizational culture. “In organisations there are deep-set beliefs about the way work should be organised, the way authority should be exercised, people rewarded, people controlled….. These are all part of the culture of an organisation” Handy (1993: 81-182).

The key aspects that compose organizational culture according to Handy are: set of beliefs, exercise of authority, and controlling and rewarding employees. When we analyse Handy’s definition, we find that there is emphasis on the leadership role on setting organizational culture. Which was missing in other definitions. That is apparent in the key words and phrases Handy used; organizing work, authority, control and rewards. These are all among the leadership role.

Edgar Schein is regarded by many scholars in the field as the most influential authority on organizational culture. He suggests that culture belongs to a group. As for organizational culture, he defines it as “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” Schein (2010: 18). Schein definition is thoughtful though general. He proposes that organizational culture comes from the employee’s collective experience. Accordingly, it is a trial and error. Until the right way of doing things emerges, the organizational culture wouldn’t mature. Schein’s definition also missed explicitly highlighting the founder and the organization leadership influence in shaping the organizational culture. However, he included these aspects on the three sources that he believes to be the foundation of an organization’s culture:

  1. the beliefs and values of the founders of the organization
  2. the learning experiences of group members as the organization evolves
  3. new beliefs, values and assumptions brought in by new members and leaders

Schein (2004: 211).

Schein focuses his definition on solutions to external adaptation and internal integration problems. While the internal integration part is easy to understand, the external adaptation is unclear. Some organizations make the market or the end user adapt to their products. Many others adapt to the needs of the market.

Critical Review of the Organizational Culture Theories:

 

Hofstede Model analyzed, criticized and compared:

 

Professor Geert Hofstede defines culture as “the collective programming of the mind distinguishing the members of one group or category of people from others” Hofstede (199: 5). Along with his team of researchers, Hofstede conducted one of the most intensive research on national cultures. The research covered more than 160,000 IBM employees in more than 50 countries.  Looking for aspects that might influence business progress overseas, Hofstede originally identified four dimensions of national culture (he later refined his work and added two additional dimensions) that influence organizational behavior. These are:

1.Power distance

2.Collectivism vs individualism

3.Femininity vs masculinity

4.Uncertainty avoidance

5.Long term orientation vs short term orientation

6. Indulgence versus self-restraint.

Hofstede created his model of national culture using these six dimensions.

In a similar research-based work, Trompenaars and Hampden-Turner came up with seven dimensions of culture. They created a management and communication model named the Trompenaars Cultural Dimensions.

The obvious similarity between Hofstede and Trompenaars models is between collectivism vs. individualism of Hofstede and communitarianism vs. individualism of Trompenaars. One can argue that they are almost identical. Looking deeper for similarities, and to a lesser extent, Hofstede’s power distance index and Tromperaans achievement vs ascription are partially similar. On the latter, people in the ascription culture value and respect hierarchy. Despite the fact that the person position might be based on their ethnicity, age or gender. This is similar to the attitude of people whom their culture scores high on the power distance.

 

Hofstede is being criticized for describing the connections between national cultures and individual personalities as statistical. “There are connections between national cultures and individual personalities, but these are statistical, not absolute: we cannot use national culture measurements to stereotype individuals from these nations” Hofstede et al (2010: 40)

While it’s understandable that stereotyping should be avoided, the evolution of culture through change on people behavior overtime is missing from Hofstede work. One can argue that Hofstede model is outdated now. As many of the countries studied and ranked in his model has changed.  Political, economical and developmental changes do impact behavioral change. Hence, the social behavior studied few decades ago has either partially or totally changed.

My additional observation of Hofstede model is that the research sample might be narrow as it targets people who have many similarities. Notwithstanding, Hofstede covered more than 160,000 IBM employees in so many different countries, I believe that there will be many similarities between the people IBM hires. Regardless of the impact of their national culture, people targeted by IBM will have many things in common. It is possible that many among IBM employees in the various countries, or those the company might target, who were interviewed by Hofstede are familiar with the U.S. market and culture. Some may have lived or studied in the U.S.

For instance, and based on my experience, U.S. corporations and NGOs prefer to hire people overseas who are fluent in English, familiar with American way of conducting business, and often U.S. cultural knowledge is a plus. This is likely the case with IBM as well. I am not sure how much impact; such possible similarity among IBM employees might have had on Hofstede findings.

Deal and Kennedy Corporate Culture:

In 1982, Deal and Kennedy developed the Corporate Culture Model. They argued that companies’ success and culture heavily depend on the environment in which they operate. Deal and Kennedy put organizations into four categories depending on the level of risk they take and how quick feedback is given to employees. The risk factor has a high and a low dimension and the feedback factor has a quick and a slow dimension. The four dimensions collectively produce the four types of cultures suggested by Deal and Kennedy as shown in figure 1 below.

Risk

Low                               High

work hard/play hard culture

tough guy, macho culture

process culture

bet-your-company culture

Figure 1: Deal and Kennedy Culture Model

Quick

Feedback/

Reward

Slow

A summary explanation by Deal and Kennedy of each culture is organized in table 1 below

Table 1

The work hard/play hard culture:

Fun and action are the rule here, and employees take few risks, all with quick feedback; to succeed, the culture encourages them to maintain a high level of relatively low-risk activity

The tough guy, macho culture:

A world of individualists who regularly take high risks and get quick feedback on whether their actions were right or wrong.

The process culture:

A world of little or no feedback where employees find it hard to measure what they do; instead they concentrate on how it’s done. We have another name for this culture when the processes get out of control – bureaucracy!

The bet-your-company culture:

Cultures with big-stakes decisions, where years pass before employees know whether decisions have paid off. A high-risk, slow-feedback environment.

Source: Deal and Kennedy (1982: 107-108)

Deal and Kennedy suggest that their model can be a starting point for looking at organizational culture. They admit that the model is simplistic and it’s hard to find an organization that exactly resemble one type of the proposed four cultures. Their recommendation for strong culture organizations is to take the best elements of each type as they fit. But that defeat their main idea of having four distinct type of culture.

Unlike other authors, Deal and Kennedy emphasize the external factors on shaping the organizational culture over the internal factors. Perhaps their argument is that companies attract certain type of employees based on the level of risk taking required and speed in which feedback is given. These two factors are determined by the external environment. In other words, the market decides on type, quality and quantity of the product needed and the company respond accordingly. The emphasize on the external factor could also be related to the location of the company. Here we can draw a similarity with Hofstede national culture impact.

The less emphasis on the internal factors’ impact on the organizational culture as well as the heavy focus on business oriented entities are the main concerns I have when reviewing Deal and Kennedy’s model.

 

Charles Handy’s Model:

Charles Handy, following the work of Harrison, introduced four different types of organizational culture. The power culture, the role culture, the task culture and the person culture. Handy’s model gives description of the organization where each of the four types of culture fits. He outlines the structure, type of employees and decision-making process for each organization described. When studying Handy’s module, one might get confused as whether Handy is focusing on the organizational culture or the structure of the organization.

The power culture is described as a spider web, the role culture is described by a building standing on columns, the task culture is described as a net and the person culture is a loose cluster. The visual description of each culture type makes it easier to understand. It also makes it easier to analyze and criticize.

In table 2 below, we find a summary of each of the four culture types Handy outlines.

Table 2

Power Culture Role Culture
  • Power culture is associated with autocratic leadership.

 Power is concentrated in the center of the organization.

 Decisions can be made quickly as so few people are involved in making them.

 Managers are judged by results rather than the means used to obtain them.

 Autocratic leadership and hierarchical structures are features of organizations with a power culture.

 Motivational methods are likely to focus on financial incentives and bonuses to reward exceptional performance (which can encourage risky short-term decision-making.

  • Role culture is associated with bureaucratic organizations.

 Staff operate within the rules and show little creativity.

 The structure of the organization is well defined and each individual has clear delegated authority.

 Power and influence come from a person’s position within the organization.

 Decision-making is often slow and risk-taking is frowned upon.

 Tall hierarchical structures are used in organizations with a powerful role culture.

Task Culture Person Culture
 Groups are formed to solve particular problems, and lines of communication are similar to a matrix structure. 

 Such teams often develop a distinctive culture because they have been empowered to take decisions.

 Team members are encouraged to be creative and there may be a strong team spirit which can lead to a very motivating environment (meeting workers’ intrinsic needs).

  • There may be some conflict between individual goals and those of the whole organization, but this is the most creative type of culture.

 There is no emphasis on teamwork as each individual is focused on their own tasks and projects.

 This type of culture can be found in a scientific research environment or in professional partnerships (say, lawyers and architects).

 Individuals who thrive in this type of environment will often find it difficult to work effectively in a more structured organization.

Source: www.IBBusinessandManagement.com

On this model, power culture is described as a spider web with the spider sitting in the middle. That is the powerful leader. In some cases, there will be a leadership committee but still with the powerful leader making the final call. But if the leader is weak, the organization will suffer. Also, the power in the center might have the wrong judgment in some instances, which will have serious consequences. The highest risk for such organization in my view is leadership transitions. When organizations have no or little rules and regulations, new leaders will have to introduce their new way of running the organization. Transitions will be tough and long. Such organizations might not survive a leadership transition.

When reviewing Handy’s model; notwithstanding, Handy is focusing on organizations; I saw great similarities in the way some governments –I am familiar with- combine the power culture and the role culture. The central government, at the political level, will have the power culture. The leader will issue marching orders to the cabinet. Policy is set and communicated rapidly and efficiently. All government officials will use the same talking points. On the other hand, we find the role culture present at the local government level, including governmental agencies. Bureaucratic offices with officials and staff running work like a machine that needs no change.

In the case of one of these governments, when the leader died, the whole government and the country suffered from destabilization.

In the current era of specialization, organizations often have different operational and support departments. Staff within these department will have little to do with the substantive work of the organization. For example, the IT department staff -which currently exist in most organizations- might have and enjoy the role culture even if their organization has a different type of culture.

Cameron and Quinn: The Competing Value Framework and its culture models:

According to Cameron and Quinn “The Competing Values Framework was developed initially from research conducted on the major indicators of effective organizations.” Cameron and Quinn (2006: 33). The research results produced polarities in the form of flexibility vs. stability and internal vs. external. Cameron and Quinn argued that these polarities are important when defining organizational success. Based on the Competing Values Framework, they developed the Organizational Culture Assessment Instrument (OCAI). The latter then suggested four types of organizational culture.

To explain how the research findings came about, it’s worth noting that Cameron and Quinn used the long list of indicators (39 indicators) developed by John Campbell and his colleagues (1974).

The list of indicators for organizational effectiveness was statistically summarized or grouped. According to Cameron and Quinn, the results provided two major dimensions that organized the indicators into four clusters, these clusters will represent four types of organizational cultures. The two dimensions were internal vs external and flexibility vs stability. Cameron and Quinn (2006: 34-35).

Figure 2: The Competing Values Framework (Based on Cameron and Quinn 2006)

The four types of organizational culture outlined by Camron and Quinn are the clan culture, the adhocracy culture, the hierarchy culture and the market culture. Table 3 below describe each culture:

Table 3

Clan 

Friendly, like an extended family

Loyalty and tradition

Teamwork, participation and consensus

Adhocracy 

Dynamic and entrepreneurial

Risk taking, individual initiative

Aim for growth and new resources

Hierarchy 

Formalized and structured

Focus on efficiency

Stability and security

Market 

Results-orientated

Competitive, emphasis on winning

Demanding place to work

This table is a summary description of the four cultures from Cameron and Quinn (2006: 37-45)

Among the key criticism of Cameron and Quinn work is that the methods they used are seen as insufficient –or by some, in appropriate- to capture the culture of an organization. Questionnaires and surveys may ask the wrong or irrelevant questions. They fail to make observations about behavior in a workplace. Also, the fact that organizational cultures can be boxed into four types was criticized. Schein wrote criticizing Cameron and Quinn work “culture cannot be assessed by means of surveys or questionnaires because one does not know what to ask, cannot judge the reliability and validity of the responses, and may not want to influence the organization in unknown ways through the survey itself. Survey responses can be viewed as cultural artifacts and as reflections of the organization’s climate, but they are not a reliable indicator of the deeper shared tacit assumptions that are operating.” Schein (2009: 101).

John Van Maanen criticized Cameron and Quinn work “John Van Maanen of the Massachusetts Institute of Technology, one of the best researchers on organizational culture in the organizational sciences, aptly pointed out to us that “leaving readers with the suggestion that four and only four cultures represent the wonderful world of organizations is a mistake. One can almost hear our anthropological ancestors turning over in their graves.” Cameron and Quinn (2006: 20-21)

In responding to this criticism, Cameron and Quinn argued that their theoretical model is not comprehensive of all cultural phenomenon. They clarify –or state the obvious- that their model applies only to organizations. Their framework provides an intuitively appealing and easily interpretable way to foster the process of culture change as they explained

Cameron and Quinn (2006: 20-21)

Cameron and Quinn indicate that the OCAI has been used in more than a thousand organizations and proven to be effective. I have no doubt that their model worked well for many organizations. But, Schein makes very valid points. To be understood, assessed, and subsequently changed or improved, organizational cultures needs to be lived. One will need to be imbedded with the organization for a period of time and interact with employees at different levels. Making observations about attitudes, language, interactions and sociability of the staff are all important factors. Add to that, the organization politics have direct impact on the organization culture. Surveys and questionnaires are not the best methods that would explain organizational politics.

Organizational Culture Influence on Innovation:

Organizational culture certainly impacts whether –and to what extent- an organization is –or has the potential to be- innovative. Innovation is the intentional introduction and application of new ideas, products, processes, or procedures to a workplace, according to West and Farr. West & Farr (1990). The first step toward innovation is the introduction of new ideas. Then comes the application part. The latter could be broken down into two stages, using the Pentathlon model, the selection and development stage and the implementation stage. So, innovation is a systematic process that takes new ideas through stages up to being implemented and adopted.

The culture role is more visible in the first stage of innovation, the introduction of new ideas. As the selection, and development stage and the adoption stage are more structure and process oriented.

For new ideas to be presented, the organization should have good methods of communications, the acceptance of diversity of views and questioning old practices, experimentation and proactivity. These are the culture aspects that aids innovation as suggested by Mike Pedler and his colleagues, Pedlar et al (2004). These aspects often exist in less bureaucratic organizations with flat structure. They allow space for thinking, and presenting new ideas. One doesn’t have to deal with lots of formalities and go through endless processes to have their ideas presented.

When reviewing the different organizational culture theories, we find organizations that fall under Handy’s task culture and person culture have the tendency to be innovative. In the two cultures, staff are empowered to propose solutions or work on their own task or project, they are encouraged to be creative, and they have the ability and the mandate to decide the best course of action. In addition to Handy, Cameron and Quinn adhocracy and clam culture promotes innovation. Both cultures are leaning toward flexibility which is a key requirement for innovation.

The Leader Impact on Organizational Culture:

 

Organizational culture is among the key elements of any organization’s success as mentioned above. Some argue that it is the main element of success. IBM strong and unique culture was extensively studied vis-à-vis the company’s progress. The company’s strong culture came from its visionary leaders, Thomas Watson. A former IBM CEO, Lou Gerstner, reflected on how he came to realize the importance of culture “I have spent more than twenty-five years as a senior executive of three different corporations [……] until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success- along with vision, strategy, marketing, financials and the like… I came to see, in my time at IBM, that culture isn’t just one aspect of the game- it is the game” Gerstner (2004: 181-182). Gerstner was the first leader of IBM who came from outside the company. He didn’t know or live the IBM strong culture. A culture that was attributed to the IBM founder became a foundational aspect of the company. For it to be changed, the entire company would need to change. That is an example of how the organizational founders and leaders might affect the organizational culture.

This argument is supported by Schein “the company founders have a particularly strong influence, partly because ‘it is in the nature of entrepreneurial thinking to have strong ideas about what to do and how to do it” Schein (2004: 226). Schein explains that the founder influence on the organizational culture is affected by their own national culture and personality, Schein (2004: 212-213).  But the leadership influence on the organizational culture is dependent on whether the organization is successful. Schein add “Where successful, their ideas will be accepted and the practice of them will be repeated until the ideas and practices become embedded as part of the organization’s culture” Schein (2004). The founder practice, ideas, norms and rituals get tested during the founding and mid-life stages of the organization. It becomes deeply embedded in the maturity stage. That is when the leader is less able to change the organization culture. At this stage, “the culture defines leadership more than leadership defines culture.” Schein (2004: 255).

2. An examination of how culture influences behaviors related to innovation and change:

This section will examine the impact of culture on the employee behaviors vis-à-vis innovation and change. The case study highlights the different lifecycles of an organization that I worked for. The organization will be referred to as “organization X”. A comparison will be made- where applicable- between organization X different growth stages and the Greiner Growth Model as well as Quinn and Cameron Summary Model of Organization Evolution.

Organization X was founded by a visionary leader as an organization with specific regional mandate. The founder’s theory of change was to build a flexible, innovative and risk-taking organization. He hired talented leaders in the philanthropy field. Among the key selection criteria was to look for individuals with integrity whom have new and creative ideas for change. The first hire by the founder was a president for organization X (to be referred to as leader A). The founder provided leader A with the necessary resources and gave him the mandate to lead organization X. Leader A closely consulted the founder in major interventions and expansion possibilities. The founder promoted risk taking and advocated against bureaucracy. He rewarded success by increasing resources. Failure was not punished. The organization took stock of lesson learn from failure and introduced course correction. The founder described organization X as an organization that is meant to be chaotic. Unlike its sister global organizations, organization X rapidly responded to emergencies, took risks, and supported challenging global issues.

As resources were available, organization X organically grown and added numerous programs under its umbrella. It became a global organization with offices all over the world. The best description of organization X is a network of various semi-autonomous geographic and thematic programs. The staff then were very dedicated and easy going. No formalities were introduced. The main focus was to get the job done. This expansion was accompanied by change of culture. One could argue that a transition from Cameron and Quinn adhocracy culture into the clan culture was taking place at this stage.

As the organization expansion to other regions was quick, we started to witness a management crisis. The organization became too big to be managed by leader A alone. This stage is very similar to Greiner growth through creativity stage. And the growing pains were also similar. Organization X expansion meant that managing the organization should be the responsibility of a group rather than an individual. The heads of the different thematic and geographic programs took up some of the management responsibilities.

While being a global organization with one vision, mission and global strategy, the different units operated almost independently. They had their own leadership, Board of Directors, shaped their strategies and decided on how to spend their budget. The geographic units and thematic programs only coordinated with one another when deemed necessary by their leadership. The need for better coordination arose. Leader A then hired functional managers to work with the various unit managers with the aim of introducing formalities and emphasizing the need for coordination. Greiner growth through direction is applicable here.

During the first few decades, leader A promoted the founder’s vision. He avoided bureaucracy and delegated management responsibility of each region to the designated regional director – the growth through delegation stage. He managed the network through providing guidance to and trusting the leadership of each unit and the functional managers. Leader A solved conflicts through mediation and encouragement of dialogue. He never enforced dialogue or coordination through.

Each geographic and thematic unit became more independent and sought more resources. The various units hired staff mainly from the region where they operate. Diversity was the norm. And the staff came with different academic and professional backgrounds, and certainly with their unique culture.  Hence, regional programs developed their own cultures, or it could be described as subculture. At the same time, organization X as a whole had a unique culture across borders. That was a culture of innovation, risk taking, and getting things done with less bureaucracy. The subcultures differed based on regional presence, and each program’s nature of work. The sum of the subcultures didn’t represent organization X culture. They neither conflicted with it.

There were many similarities despite the different cultural background of the staff. One can argue that it was the reason that attracted individuals with certain behaviors, talents and passion to join organization X. It could also be argued that senior managers hired likeminded staff. The end result was that all the staff attitude suggested satisfaction with and adherence to the organization culture.

Notwithstanding the rapid growth, organization X continued to have a flat structure for a long time. All ideas were almost equally presented. Staff members would have the ability to lead big projects if they came up with an interesting idea or proposed a solution to a problem. The global reach of organization X and the availability of excellent communication channels between various regional programs was an asset. Solutions from a region were applied to similar problems in another region with modifications. Worth noting that while the infrastructure for global communication was there, staff from different units interacted only at will.

Some of the downsides of the flexible structure and leadership style is resource waste in many instances. That happened as coordination was not mandatory. Similar projects were conducted or supported by various units simultaneously.

This stage of organization X life is similar to Quinn and Cameron Entrepreneurial and collectivity stages. Quinn and Cameron (1983). The focus during the beginning of this period was on finding a niche for organization X. lots of ideas were presented and innovation was encouraged. We had little planning and coordination at this stage. When the organization got some shape and found its niche, informal communication and structures emerged. Staff had a sense of mission and were very committed. The organization was still very flexible and innovative.

At some point, leader A retired. The successor was a president (to be referred to as leader B) who focused on integrity, introduced processes and procedures aiming for more efficiency and increased productivity with the same available resources.

Leader B was very knowledgeable, sharp, decisive and hardworking. He had hands on management style. He emphasized the need for accountability. The work was scrutinized to a detailed level to ensure productivity.

Leader B introduced a lengthy transition aimed at reorganizing the organization at all levels. He changed the structure, the strategy, budget review, and set up management and financial processes. He further defined how the various programs should relate to the head office and to each other. At the beginning of his tenure, leader B didn’t delegate. He managed and reviewed newly introduced processes. That created a bottleneck. The transition period in some way illustrated Handy’s power culture.

Leader B guided the staff behavior through being tough and decisive. Some employees favored his style of increased efficiency, enforced coordination, and emphasis on accountability. Others favored the old flexible and innovative style that counted on the individual employees’ integrity and sound judgement. This era is somewhat similar to Greiner growth through coordination and control stage.

Some of those who couldn’t tolerate the change decided to leave. Many others were hired by leader B. The new comers didn’t experience the flexible and creative organization. That divided the staff into two groups and organization X subsequently had two cultures for some time. The old, flexible and the new bureaucratic cultures were clashing most of the time during the first few years of the transition. Leader B managed to make the new organizational culture prevail.

The flexible, less bureaucratic, and innovative organization was significantly changed. Subsequently, the organization culture changed.

Leader B succeeded in making organization X more efficient. By the end of the transition period, organization X had a firm structure, well defined processes and procedures and very clear job descriptions. The newly created management team shared management responsibilities with leader B. The power culture of Handy gradually moved at this stage to the role culture.

The change in the organization culture, however, impacted, or rather eliminated, the key principle of flexibility and creativity as set for by the founder.  The end result was a bureaucratic organization that is more efficient with high integrity and accountability. This transition could present the formalization and control stage as described by Quin and Cameron. All the elements of this stage were apparent in organization X during and after the transition. We had stable structure, many formal rules, and we were constantly reminded of the need to be more efficient.

It is worth noting that the term organizational culture was never mentioned or discussed during the tenures of leader A and leader B. All the discussions focused on strategy, processes and procedure. And how to increase productivity while saving resources. It is apparent, though, that all discussions about change touched on organizational culture but without referring to it. Organization X was innovative when it was flexible and less bureaucratic. It became more productive and less innovative through the transition introduced by leader B, who had the power to change the organizational culture. And he did.

3. Recommendations to leader B: Sound strategies and actions to  enhance organizational culture: 

Edgar Schein mentioned that he gets many inquiries about creating or changing a culture. Schein (2015). On that article, he asked more questions about “why the culture needs to change” than giving answers. I will ask the same questions of Schein and follow the steps he recommended in order to change an organization culture.

In this section, I will propose a strategy and action plan for leader B to enhance organization X culture at the beginning of his tenure. Borrowing from Schein’s questions, I will ask myself these questions: What is origination X problem? what kind of changes are needed? Does organization X culture need to be changed? And why? What are the appropriate steps to follow?

The argument for change: organization X at the end of leader A tenure was a global giant that was difficult to manage. As the organization further grows, it will be impossible to manage without introducing new processes, procedures, structure and systems that governs how business is conducted and specify the relationship between the headquarter and the geographic and thematic programs. The lack of coordination and formal processes resulted in resource waste. The organization productivity could be sustained or increased using the same resources. The innovative nature of organization X should be preserved while the organization introduces new processes and structure for efficiency. By the end of the change process, organization X should also preserve its vision, mission and objectives.

Communicating the argument for change: This argument should be communicated to the entire staff by leader B before the change process commence. The staff should also be informed that a consultation process will proceed the actual change process. The consultation will invite the staff to outline their concerns about what is not working, ideas for a better way to enhance organization X efficiency and productivity and suggestions on how to execute the change plan.

Engaging the Leadership: I will propose that leader B involve the management committee in this process from the very beginning for two reasons. First, to explain the need for change and why the projected future is better than the current status. And second, to use the division leaders as advocates for the proposed change with their subordinates. Leader B and the management committee will design regular sessions to brainstorm about what to change and how and what to preserve. They should bear in mind whether the three sources of organizational culture proposed by Schein need to change Schein (2004: 211). In particular the founder beliefs and values.

Engaging the Staff: after leader B convince the management committee that some change is required. That organization X should introduce new structure and systems as well as defining the relationship between the various units and increased coordination. A change committee should be set up. This committee will include staff from different programs and levels of seniority. The objective of the change committee is to engage the entire staff on the change process. The committee will be tasked with figuring out what organization X culture present currently, what elements of the culture should change and how. The committee will execute this task through organizing group interviews, and designing surveys and questionnaires.

Implementing the change: Once the change committee concluded its work and the findings are submitted to the management committee, the leadership will need to design an implementation the change plan. The change plan should be divided into two categories: hard change and soft change. The hard change will include the introduction of new processes, structure and systems. The soft change will focus on enhancing organization X culture. That entails changing some elements of the culture. This change will include changing some aspects of the staff behavior vis-à-vis how they do their jobs, how they interact with one another, how they share information and how they coordinate. While the hard change should have a clear and short timeline, the soft change will take longer to fully be in effect. The two changes should be closely linked and observed. The management team should understand that true cultural change happens when the staff all over the organization start to do things differently as suggested by Pedler and his colleagues. Pedler et al (2004: 168).

Bibliography:

 

Bower, M. 1966, The Will to Manage: Corporate Success Through Programmed Management, McGraw Hill.

Cameron, K. and Quinn, R. 2006 Diagnosing and Changing Organizational Culture, Jossey-Bass, San Francisco.

Deal, T. and Kennedy, A. 1982, Corporate Culture: The Rites and Rituals of Corporate Life, Addison-Wesley.

Gerstner, L. 2004, Inside IBM’s Historic Turnaround, Who Says Elephants Cant’s Dance?, Harper Business, New York.

Handy, C. 1993, Understanding Organizations, Penguin, London.

Hofstede, G. (1991). Cultures and organizations: Software of the mind, McGraw-Hill, London.

Hofstede, G. Hofstede, G. and Minkov, M. 2010, Cultures and Organizations, McGraw Hill, New York.

Pedler, M. Burgoyne, J. and Boydell, T. 2004 A Manager’s Guide to Leadership, McGraw Hill, London.

Quinn and Cameron, 1983, Organizational Life Cycles and Shifting Criteria of Effectiveness, Management Science, Vol. 29, No. 1 (Jan., 1983).

Pettigrew, A. 1979, On Studying Organizational Cultures, Administrative Science Quarterly 24.4.

Schein, E. 2004, 2010, Organizational Culture and Leadership, Jossey-Bass.

Schein, E. 2009, The Corporate Culture Survival Guide, New and Revised Edition, Jossey-Bass.

West, M. & Farr, J. 1990 Innovation at work. In West, M. & Farr, J (Eds.), Innovation and creativity at work: Psychological and organizational strategies, Chichester: Wiley.

Online Sources:

Tharp, B. 2009 http://www.thercfgroup.com/files/resources/Defining-Culture-and-Organizationa-Culture_5.pdf

http://www.businessmanagementib.com/uploads/1/1/7/5/11758934/________types_of_organisational_culture.pdf

http://constructiveculture.com/so-you-want-to-create-a-culture/



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