Organisational Culture

BUSS4 Managing Change - Culture

Organisational culture sums up the spirit, the attitudes, the behaviours and the ethos of the organisation. It is embodied in the people who work within the organisation; traditions that have build up over time seem part of fabric of the buildings

In this section we use Professor Charles Handy’s way of classifying business culture to analyse the culture of an organisation

We also look at how to change a culture and assess the importance of culture

Handy developed four ways of classifying a business culture

The first is the power culture Handy illustrates this as a spider’s web the all-important spider sits in the centre and is the key to

the organisation He is surrounded by ever-widening circles of intimates and

influence. The closer you are to the spider the more influence you

have Organisations with this type of culture can respond quickly

to events But they are heavily dependent for their continued success

on the abilities of the people at the centre They will tend to attract people who are power orientated

and politically minded, who take risks and do not rate security highly.

There are likely to be few rules or procedures and although this encourages flexibility it may result in unethical actions being taken in an attempt to please the boss

The leadership style is autocratic

Role Culture The role culture can be illustrated as a building

supported by columns and beams each column and beam has a specific role to

playing keeping up the building individuals are role occupants but the role

continues even if the individual leaves This type of organisation is characterised by

strong functional or specialised areas coordinated by a narrow band of senior management at the top

the work of the functional areas and the interactions between them are controlled by rules and procedures

Position is the main power source in the role culture

People are selected to perform roles satisfactorily

Role Culture Rules and procedures are the chief methods of

influence This type of organisation is likely to be

successful in a stable environment, where the market is steady, predictable or controllable, or where the product’s life cycle is long

This organisation finds it difficult to adapt to change

Such an organisation will be found where economies of scale are more important than flexibility

Or where technical expertise and specialisation are more important than product innovation or service cost – for example, in many public service organisations.

Task Culture Task culture is job-or project-oriented, and

its accompanying structure can be best represented as a net

Some of the strands of the net are thicker or stronger than others and much of the power and influence is located at the at the knots

Task cultures are often associated with organisations that adopt matrix or project-based structural designs

The emphasis is on getting the job done the culture seeks to bring together the

appropriate resources and the right people at the right level in order to assemble the relevant resources for the completion of a particular project

Task Culture It is a team culture, where the outcome of the

team’s work takes precedence Influence is based more on expert power than on

position or personal power influence is more widely dispersed than in other

cultures. The organisation can respond rapidly since each

group ideally contains all the decision-making powers required.

Individuals find that this culture offers a high degree of autonomy

The task culture is therefore appropriate when flexibility and sensitivity to the market or environment are important, where the market is competitive, where the life of a product is short and/or where the speed of reaction is critical

Control in these organisations can be difficult

Person Culture• Person culture is an unusual culture• This type of culture is illustrated by a loose cluster or

a constellation of stars• In this culture the individual is the focal point• There is no organisational structure• There is no overriding objective• Not many organisations can exist with this sort of

culture because they tend to have some form of corporate objective

• Control mechanisms and management hierarchies are impossible in these cultures except by mutual consent

• People do what they are good at and are listened to for their expertise.

• Examples are lawyers or accountants

Changing the cultureWhen a new CEO joins a business his or

her first impressions will be of the culture

Do the staff put the customer first?Do they enjoy Monday mornings?How do they speak to each other etc If he is unhappy with the culture and

sees it as a barrier to achieving his objectives he may want to change the culture

But can he change the culture? Johnson and Scholes describe the

culture as a complex webA good analogy for a corporate culture is

that it is the DNA of the business

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

If it really is the DNA of the business is it actually possible to change the culture?

Culture is the DNA of a business

Changing the cultureHandy described culture as ‘the way we

do things around here’This tends to be very resistant to change In 2007 Newcastle United FC appointed

the hugely successful Bolton Manager Sam Allardyce to transform its underperforming stars

He brough his own results orientated approach to St James’ part

He soon found himself swamped with supporters’ furty

The Newcastle way (their culture) was for bright, attacking, flair football.

Sam did not last long

Changing the culture For the CEO to change the culture he will need buy in

from the employees He will need to make them understand that there is a

need for change If they don’t believe change is necessary they will not be

committed to it They will need to really believe that it is going to happen They will need to hear a clear and consistent message They will need to see everyone living up to it

If for example part of the change is to cut costs and they see the CEO driving a brand new BMW they will not believe in it

He will need to look at changing every part of the cultural web

He will need to keep showing the employees evidence of change

He will need to find ways of pacifying the resistors Culture takes a long time to evolve and a very long time

to change

Culture change is hard – most attempts encounter problems & resistance

Source: Booz & Co Perspective on Organizational Culture Change

Evaluation Business leaders make lots of claims

about culture among their staff They use words like ‘positive’, ‘can do’,

and ‘entrepreneurial’ Does the fact that the leader is saying it

make it true? No! The leader will never admit that his staff

are lazy, negative or bureaucratic A well-judged answer about culture will

look beyond the hype and search for the evidence

Is there evidence that staff suggestions are welcome and valuable?

Is there evidence that mistakes are seen as learning experiences?

Is there evidence that the staff love their job and look forward to coming to work?