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The factors affecting organisational culture. To what extent can managers influence the culture of their organisation?

Decades of change in economies of scale (e.g. globalisation), organising work (e.g. esolutions), knowledge sharing (e.g. internet), process and production technology (e.g. nano-technology), social norms (e.g. gender issues) etc. have initiated a cataclysmic shift in organisational and cultural paradigms. Goffee and Jones (1996: 146) research suggests, that ‘over the last decade, a number of large, well-established companies with strong cultural traditions have been forced, mostly through competitive threat, to change their culture’. Unwillingness or incapability to do so might lead to sustainability problems (Scott). Pop-management writings share a lot of optimism in how managers can reshape, reengineer, reorganise, restructure and change their organisations and organisational culture. Academically planned organisational cultural change is recognised as a rather difficult project (Schein, Brown, Bate, Alvesson, etc.). Kotter (2007) states, that a few of these endeavours have been very successful, a few have been utter failures, but most of them fall somewhere in between, with a distinct tilt toward the lower end of the scale. Why? To answer this question the factors affecting organisational culture should be distinguished and assessed. To analyse to what extent managers can influence the culture of their organisation, one should analyse firstly how much managers could influence or use the factors affecting organisational culture. This essay has four general purposes. Firstly to systemise, describe and assess the factors affecting organisational culture. Although theorists have identified a large number of intrinsic cultural elements originating from organisational culture, I would argue that the list of factors affecting and influencing culture is in some extent different from the list of elements originating from organisational culture.


The second purpose of the work is to provide a typology of the situations were the stimuli to cultural changes evolves. This automatically leads to the third purpose of the essay to analyse to what extent managers can take initiative to respond or to react to those situations in order to make the best out of the situation. Do these initiatives of management inevitability lead to managerial influence and change of the culture? The questions of ‘What means ‘influencing’ or ‘changing’?’, ‘Is there a scale for measuring an extent of influence or cultural change?’ and ‘How to influence in different situations?’ are of great interest here. Last but not least, if Kotter (2007) is right, then the fourth purpose of the work is to assess why so many efforts by managers to influence culture fall toward the lower end of the extent scale. What are the major traps in not succeeding to influence one’s organisation’s culture? Although writers and researches are ‘disagreeing in the degree of overlap between terms of managing and leadership’ (Yukl: 253), the terms in this essay are used interchangeably.

Factors affecting organisational culture Organisational culture is a complicated and broad meaning phenomenon. It is hard, even impossible to define its components as culture or organisation comprehensively in few sentences. According to Brown (1995: 7) even by the year 1952 the anthropologists Kroeber and Kluckhohn had isolated 164 different definitions of culture. Brown concludes that there is no consensus about defining culture. According to Oxford English Dictionary (OED) culture stems from Latin word ‘colere’ meaning ‘to cultivate, to worship’. OED defines culture as ‘the distinctive ideas, customs, social behaviour, products, or way of life of a particular society, people, or period. Hence: a society or group characterised by such customs, etc.’ I think the definition of culture reveals some very important characteristics: people,

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sociality, interaction, human characteristics, activity, experience, objective and retrospect. The term organisation stems ‘from Latin organizare and means to accompany on the organ, to arrange, to provide with bodily organs or physical structure; organisation is the condition of being or process of becoming organised; organise means to coordinate or manage the activities of a group of people’ (OED). The definition incorporates characteristics as: people, activity, structure, objective and purpose. Referring to the above characteristics of culture and organisation; comparing and analysing different definitions of organisational culture, I have found that Brown (1995: 32) has succeeded comprehensively to summarise the term organisational culture as ‘the pattern of beliefs, values and learned ways of coping with experience that have developed during the course of an organisation’s history, and which tend to be manifested in its material arrangements and in the behaviours of it’s members’. Brown (1995: 33) further reminds us that cultures are not static and they evolve over the time – organisational culture is subject to continuous process of development and change because of organisational learning which occurs as employees seek answers to problems of external adaption and internal integration. As culture is on one hand inherently conduced to change, it is on the other hand resistant to change (Alvesson). Bate argues that these forces of encouraging and/or resisting change are related to social structures and natural events and are involved in the gradual managing of cultural ideas and practices within nations or groups. As Brown (1995: 33) states ‘different elements of a culture are likely to be differentially resistant to change’. I think that need for change and resistance to change determine the characteristics by which to assess and winnow out the factors affecting organisational culture. By examining different definitions of organisational culture through the spectrum of change and resistance to change, I have synthesised out five major factors affecting organisational culture: history, people, artifacts, environment and management. Author’s synthesis of factors and their relations is summed up in the Figure 1.

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Environment

Artefacts

People Resistance to change

Histo ry

MANAGEMENT

Need for change

Figure 1: Factors affecting organisational culture (author’s own interpretation). In my mind, history is the core point of organisational culture. As the organisation evolves, it leaves behind footprints which characterise an organisations development and change. I fully agree with Brown (1995: 26) that ‘culture can only be fully understood as the product of historical process’. History is also an important origin of other elements of organisational culture (norms, artifacts, behaviour patterns, symbols, basic assumptions etc.). The argument ‘we have always done this or that way’ reflects to historical characteristics one could often hear in mature companies, but rarely in start-ups. History cannot be changed, but it patterns and reflects the way the organisation most probably will react towards changing efforts or resistance to them and thus it gives to management a possibility to influence the future. It is an important factor- as history is a tool to understand, evaluate and manage organisational culture. Using a metaphor,

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history gives a bouquet to the organisational flavour. A good ‘managerial nose’ will highly respect and take advantage of it when managing culture. Organisational history is created by people – the next layer of a complex phenomenon of human nature. This layer includes invisible manifestations of human orientations, such as: a) basic assumptions about environment, reality, human activity and interaction; b) human moral and ethical codes, behavioural patterns and; c) people beliefs, values and attitudes (Schein, Brown). They all belong to one layer as there is high overlap between them. For example values are intimately connected with moral and ethical codes or basic assumptions represent in some extent unconscious beliefs (Brown). There should be no doubt that the most difficult and vital aspect of an organisation’s culture is the human being with its deeply rooted complexities of assumptions and behavioural patterns. Culture and organisation are outcomes of only human activity (Alvesson). Without people there is no culture, nor organisation. ‘No person, no problems’ as the saying went in soviet times. Culture reflects the ingrained and automatic behaviours of a person and a group which is built over during a sustained period of time and steps taken to change these are nearly always met with individuals resisting change by pursuing their own self interest over the organisational need (Kotter, 2007). In organisation’s cultural context it is the people reaction whether to hold on to the existing paradigm and resist change or when and how to accept the change. Therefore the layer of people is crucial factor in organisational culture. The most visible and most superficial factors affecting organisational culture are artifacts. Brown (1995: 9) argues that ‘artifacts refer to totally physical and socially constructed environment of an organisation; that they are product of human action and; they have a physical presence and an aim’. I would argue that artifacts act as an adapting and engaging layer between people and environment. According to Brown and Schein, artifacts consist of: a) material artifacts like corporate logos, mission statements and corporate architecture; b) linguistic artifacts such as metaphors, stories and myths; c) behavioural artifacts such as rites, rituals and

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ceremonies and; d) miscellaneous artifacts such as heroes and various organisational symbols. The organisation might rely on its performance to a simple set of artifacts which hold the essence of a whole social system (Brown 1995: 10). For example office space layout. Change in layout can generate a huge change in the interaction between colleagues, in the use of communication devices, etc. Just changing one simple artifact, the overall cultural phenomenon of the organisation could change. The outer layer of factors affecting cultural change is environment. Handy (1999: 195) has resolved the environment to economic environment; the market; the competitive scene; the geographical and societal environment. I would generalise Handy’s approach to economic and societal environments and add to the list the industry, national and supranational levels of culture. I think that most of the initiatives to change an organisation come from the environment. Environmental changes usually require an organisation to adapt and quickly respond. For example, the current financial crisis has forced lot of companies to quickly carry out layoffs, cost savings and cash holding strategies. The cultural concepts of ‘fun and profit’ or ‘people first’ are not sustainable any more. Environment is definitely related also to societal ultima ratio factor. For example changes in laws. To avoid legitimacy problems companies have to respond to these changes. Other examples are the societal relationship to nature, water, smoking, gender, ethnic or even remuneration issues, which need deep organisational conforming or the company will face societal backlash. A good example is the remuneration of management in the financial sector. Broader cultural characteristics play a vital role in an organisation’s culture. Human nature and character are influenced by far broader spectrum of cultural elements than an organisation represents. Sub-cultures, organisational, industry, national and supranational culture embed deeply into an organisation’s culture. For example different nationalities prefer different management styles, power structures, etc. Different cultural levels are deeply interdependent on each other (Brooks). 6


Guided from the above said I think that environment represents a powerful factor affecting organisational culture. The fifth factor affecting culture, often the litmus paper test for organisational involvement in responding and reacting towards changing environment – is the management. Management should have a good insight about needed change, have in hand, tools like artifacts and history, control the resources such as people and be capable to be the principal architect behind planning and implementing change. Management should play the first violin in engaging and adapting their organisation in a changing environment. As managers overlap and connect together the other factors affecting organisational culture, they should be able to influence the culture of an organisation. The ‘should-s’ are intentional here, because nevertheless the tools and resources in the hands of management, the influence according to Kotter (1995 and 2007) and my personal view in average is rather week. Why? The next chapter will analyse the essence of this question.

The extent of influence The question to what extent managers can influence the culture calls for asking firstly: What is called an influence in cultural context anyway? Can it be somehow measured? ‘Organisational culture researchers disagree vehemently about how do culture change’ (Dopson). Bate (1994: 3) has argued that ‘change, is a highly complex business, difficult to understand, and because of its nonlinear nature almost impossible to deal with systematically. There is no scale; there are no standard measures available as such, because there is no clear beginning, nor a discernible middle or end and few people ever agree on what really happened, if indeed anything has happened at all’. Schein adds that change is hardly measureable because of biases and experiences which influence how the change is experienced or seen. Perhaps the quote from Potter Stewart, a judge on the United States Supreme Court, in his

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definition of pornography is the most appropriate way to describe cultural change: ‘I know it when I see it’ (Gewirtz). Although I agree that gradual change is hardly measurable, I think that the extent of intentional change is measurable through the scale of whether one’s influence has resulted in a desired outcome or not. According to my empirical findings the managers have three general possibilities to be involved in influencing culture: evolutional drift, gradual managing of culture and intended cultural change situations. Alvesson also distinguishes three versions of ambitious cultural change: the grand project; organic movement and everyday life reframing. Putting them in a more logical structure, I would analyse from the managerial influencing point of view, the situations of evolutional drift, the every-day life re-framing and grand technocratic project. In the majority of companies change happens without fuss, war cry or selling. Cultural change as an evolutional drift means that organisation engages new ideas gradually. ‘There is no strong, uniform will acting as the centre in the change, neither is there that much of intentionality and a clear plan, whereas persons or groups within the organisation revise their thinking, valuing and giving meaning to changing phenomena spontaneously’ (Alvesson, 2002:179). The initiative may originate outside or within the organisations. A critical mass of people have to feel disaffected with existing beliefs, practices etc. and are willing to adapt a new set of ideas. As Alvesson notes, the cause for change could be broadly shared new ideas in society, it may also be people in organisations noticing changes in customers when they interact with them; calling for new responses and potentially involving reconsideration of important ideas and beliefs. The over riding characteristic is the relatively broadly shared exposure to something implying a change in people minds and this change happens without managers being highly involved (Alvesson). These evolutional cultural changes may be a strong influence on organisations. All levels of managers could participate – to notice, evaluate and wisely use the upcoming challenges by sharing and supporting new ideas and orientations. The managers do not necessarily have to be the initiators or those hardest pushing for the 8


re-orientations (Alvesson). In the event of evolutional drift, the extent of intentional influence may be rather small. By holding a finger on the pulse the outcome of influence could result in deep cultural change. The second situation is everyday re-framing. According to Alvesson (2002: 180) ‘everyday re-framing tends to be driven by one or a few senior actors, frequently a manager but also informal authorities, and small groups of people may be central’. In using a metaphor I would call everyday re-framing a wise use of herd instinct. This kind of examples can largely found also in top-managers autobiographies, where the organisations behaviour heavily aligns to its leader(s). Richard Branson, Alan Greenspan, Warren Buffet just to name some of them. If senior managers strongly support a value, their personal example seems to have an effect on broader patterns in organisation (Hofstede et al., 1990). As Alvesson (2002:180) concludes, the everyday re-framing is ‘mainly an informal culture shaping agenda, involving pedagogical leadership in which an actor exercises a subtle influence through the re-negotiation of meaning’. I think that the leader has to be charismatic, have a high emotional intelligence and earned respect from subordinates. From my own experience and ‘gut feel’ I would bet that most significant and real changes happen through everyday re-framing. Alvesson (2002:181) concludes that ‘the everyday re-framing is for many managers more appropriate option of cultural change than being mobilised as implementer of grand project’. I think everyday re-framing gives a great opportunity for managers to influence organisational culture in large extent. The outcome of it depends highly on manager’s personality, skills, commitment, persistence and stamina. When thinking about cultural change the most known from the literature and what people most probably have in mind, is the grand technocratic project – the promised way of a transformation from a certain cultural situation to another, usually more superior and profitable one, although it is recognised that this is not easy, often takes place slowly or even gets doomed (Alvesson).

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As much as there are numerous theories about organisational culture there are commensurate structured approaches dedicated to methodologies, approaches and ideas how to change organisational culture. Schein, Brown, Bate, Goffee and Jones, Kotter (1995), Handy, Alvesson are just a tip of the iceberg. I would not argue whether one of the models is better than the others. In order to make peace between all the models I would steel a statement from Goffee and Jones (1996: 147) that ‘before attempting to change…manager needs to think a bit like a doctor taking on a new patient’ and add that different illnesses need different doctors, thus different treatments. I am sure that with a little bit of luck, the right initiatives in the right places will influence. If these ways are persistently used to become part of the everyday routine, one could notice a higher degree of influence or change in an organisation’s culture. Achieving planned cultural change is very fashionable, but it may give a misleading picture of what actually is presently taking place. A systematic study of 448 European firms during the 1992-96 period indicated that some changes were taking place, but these were modest, not radical (Alvesson). Most reflective writers (Schein, Brown, Bate, Alvesson, Handy etc.) treating the topic of change, support the above and downplay the chances of intended cultural change. As Bate (1994: 202) succinctly summarises: ‘they are only words on pieces of paper (my words, at that), not reality. The problem with words is that they often become disconnected from their subject; like shadows they are simpler and sharper round the edges than the real thing’. But why so often the outcome of influence of these sophisticated ‘words on paper’ is falling toward the lower end of the extent scale? Kotter 2007 points out that unsuccessful transitions almost always founder during at least one of the following phases: generating a sense of urgency; establishing a powerful guiding coalition; developing a vision; communicating the vision clearly and often; removing obstacles; planning for and creating short-term wins; avoiding premature declarations of victory and; embedding changes in the corporate culture.

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I think the reasons are much more general and related to the managerial side. I think there are three major points which devalue the extent managers can influence the culture. Firstly I think the reason relies in management using artifacts as the engine and not as the gearbox to influence culture. Using or changing an artifact, like corporate symbols, physical layout or company’s structure will most probably not automatically lead to severe cultural change. Artifacts are like an adapting layer between gradually changing environment and people – between steering and engine. Although, through artifacts one could affect organisation’s culture, I think that artifacts are a gearbox in the hands of management. Using only these tools without engaging people will be not enough to influence the motion or standstill. Changing culture means firstly changing people – the engines for change are the people. Before you shift gear you should start the engine by giving some fuel and electric spark. From a practitioner’s empirical point of view I think that using only artifacts as influencing factors has been the major reason why many efforts to change culture have failed or not fulfilled the expectations. One cannot influence the culture of an organisation in broad extent by changing artifacts and leaving people out of the scheme. Secondly, a lot of research on change is focused on how to change the organisational culture and/or the people, but not the question how managers should change by them selves (Alvesson). I have seen many doomed efforts where the principal characters in architecting and building the change were exceptionally excluded from the change by themselves. If the heart and mind of the top management is not coherent to the change, if principal characters of the stage are not mentally engaged to the goal and if exceptions are made to the protagonists, the extent of influence will most probably be close to nil. Managers will not be able to affect cultural change if they are not changing themselves or if their own personal beliefs, values and attitudes are not conforming to the desired objective. The vital criterion is that the managers have to change. If it will not happen the substitution of management is inevitable. Thirdly, there is often not enough commitment. Changing organisational culture is definitely difficult and long-term project. The problem relies behind the issue that a) those addressed to contribute most to a change are in a state of rotation flux, thus 11


frequently move further in their position in the organisation and/or; b) managers have a lack of stamina (Alvesson). Jackall (1998: 143) argues the issue convincingly that ‘a choice between securing one’s own success by jumping on and off the bandwagon on the moment, or sacrificing oneself for the long-run good of a corporation by diverting resources and really seeing a program through is, for most managers, no choice at all. Ambitious managers see self-sacrificing loyalty to a company as foolhardy’. Watson (1994: 117) amends that changes ‘are pushed through by managers trying to make a reputation and a career, but they do not stay on to see them through’. I agree with Alvesson that it is really difficult to install and make specific practices work if top managers stay only a few years in their positions and the successor may have completely different ideas, approaches and/or tools to try to put one’s own imprint on the business. A lot of change initiatives are coupled with management fashions and hype, frequently leading to half-serious efforts that are seldom carried through. The result is resistance from people to managerial change initiatives with the declaration of ‘again a new mission statement’ (Alvesson). I would argue that the chances to influence organisation’s culture by managers who are ‘jumping on and off the bandwagon’ are very limited. Managers, especially top managers, who take and carry out technocratic changes with stamina and timehonoured commitment will have more success in attaining successful influence to organisational culture. As Kotter (1995) has well stated that if realised that change usually takes a long time, it can improve the chances of success and fewer errors can spell the difference between success and failure. A good example of high extent cultural influence is the Home Depot example. As Charan indicates the new CEO of Home Depot (notice the substitution of management) tackled the challenge from one side partly through personal leadership, mixing encouragement with ultimatum and fostering desired cultural norms like accountability through his own behaviour (notice every-day reframing), from the other side deployed an array of specific tools (notice artifacts) designed to gradually change the company’s culture (notice technocratic project) and succeeded instantly to change Home Depot employees behaviours, beliefs, social interactions and nature of decision making. ‘Their plan was simple, logical and not very innovative’ (Charan). He continues that firstly Home Depot management evaluated and analysed the key 12


aspects of the culture that had to be changed for the company to meet the new performance goals (notice desired measureable outcome), then they developed and adopted a variety of standard tools (notice artifacts) in such a way that they strengthened the business and modified the culture and finally as the mechanisms took hold, the energy of employees became positive (notice engaging people) and so the feedback made possible to further accelerate the change (notice using tools as gearbox). By placing a trusted associate in a HR position and by making him the highest paid executive in the organisation the CEO signalled that, with stamina, longterm commitment and with no jumping on and off the bandwagon, changing the culture would be central to getting the company where it needed to go (Charan). I guess that retrospectively Home Depot technocratic change would have fit to majority of changing models and any author of these models would argue that their academic approach was somehow followed. I think, the crucial factor was the understanding how to influence the factors affecting organisational culture and not falling into the traps described above.

Implications and conclusion Managers have many possibilities to influence the culture of their organisation and the extent of the influence relies on the managers’ ability to take advantage of the factors affecting their organisation’s culture. In this essay I have differentiated and assessed five factors affecting organisational culture: history, people, artifacts, environment and management. History plays a core role in the organisations culture and forms the basis of the cultural paradigm. History cannot be changed; it can be used to form the future. Without people there could not be any organisation or culture. Culture and people are closely interrelated. Changing people in general means changing culture. Artifacts represent a supportive and coping layer between environment and people. Artifacts are powerful tools in the hands of management to respond to changing environment. Most of the stimuli influencing organisational culture come from outside the company – from the environment. Changes in economic, societal and broader cultural

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environment require the organisations to engage, and thereby to adapt its culture to the changed environment. The architect and bricklayer of organisational response is the management. By having the artifacts and history as tools and people as resources in their hands; the managers should be equipped to respond to the environmental changes and should be able to influence organisation’s culture. In general there are three possibilities for management to be involved in cultural influence and change: evolutional drift; everyday re-framing and grand technocratic project. The three initiatives of change are not contradictory and in many cases go hand in hand. During evolutional drift the management may feel or experience good internal possibilities and causes for change and therefore seizes the challenge to influence. It makes for all levels of management possible to engage in influence and therefore enables to generate quite remarkable influence towards organisation’s culture. Encouraged by inner beliefs, values in life, societal changes or environmental challenges many managers, without getting specific instructions to do something special, take initiatives to re-frame the factors affecting sub-culture, organisation’s culture or even industry culture. By daily managing the culture the managers can have remarkable outcome in influencing organisations culture. For many managers everyday re-framing is more appropriate option of cultural change than being mobilised as implementer of technocratic change project. The better known methods of influencing culture are the comprehensive academic grand technocratic projects. The statistical evidence supports the writers’ arguments that this way of influencing culture by management usually does not perform in planned and desired way. Although the reason for bad performance might rely behind a plenty of variables, I have examined three major traps which managers should avoid to be more successful in influencing culture. The first trap is trying to influence people and thus culture through using only artifacts and not engaging people to change. It will lead to little influence of organisations culture or none at all. The second trap is related to excluding management from the 14


changing event. If management is not engaged, the people will not dare follow and thus the influence is little. The third trap is related to the lack of stamina. Changing culture needs a long term commitment. Frequently changing circumstances like management rotation or change of leadership concepts will cause higher resistance to influence and consequently less influence on cultural change. Although cultural influence is not measurable through a common scale, I argue that it can be measured by whether ones effort to influence culture has achieved the desired result or not. This extent relies on the manager’s character, wisdom, knowledge, persistence, commitment and stamina to utilize factors affecting culture and to avoid common traps.

Sander Kaus February 11, 2010

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References Alvesson, M. 2002. Understanding Organisational Culture. London: SAGE Publications Bate, P. 1994. Strategies for Cultural Change. Oxford: Butterworth-Heinemann Brooks I. 2006. Organisational Behaviour: Individuals, Groups and Organisation. London: Pearson Education Brown, A. 1995. Organisational culture. London: Pitman Charan, R. 2006. Home Depot’s blueprint for Culture Change. Harvard Business Review, April 2006, 84 (4) Dopson, S. 2010. Organisational Culture lecture slides Gewirtz, P. 1996. On 'I Know It When I See It'. Yale Law Journal, 105 (4) Goffee, R. and Jones, G. 1996. What holds the modern company together? Harvard Business Review, 74 (6) Handy, C. 1999. Understanding Organisations. London: Penguin Group Hofstede, G. et al. 1990. Measuring organisational cultures: A qualitative and quantitative study across twenty cases. Administrative Science Quarterly, 35 (1) Jackall, R. 1988. ‘Moral Mazes. The World of Corporate Managers’. Oxford: Oxford University Press Kotter, J. 1995. Leading Change: Why Transformation Efforts Fail. Harvard Business Review, Mar/Apr, 73 (2)

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Kotter, J. 2007. Leading Change. Harvard Business Review, Jan, 85 (1) Online Oxford English Dictionary, www.oed.com (accessed 08.02.2010) Schein, E. 2004. Organisational Culture and Leadership. San Francisco, CA: JosseyBass Scott, R. 2001. Institutions and Organisations. London: Sage Watson, T. 1994. In Search of Management. London: Routledge Yukl, G. 1989. Managerial Leadership: A Review of Theory and Research. Journal of Management, 15 (2)

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Essay On Organisational Culture by Sander Kaus