Contents
About the Author
Preface
Introduction
Stories and Inspirations to Guide Cultural Changes
Cultural Change is About Identity More than About Behavioural Change
Cultural Change Needs Deliberate Change Strategies and Ongoing Strategic Conversations
Leaders in Cultural Change Set an Example and Create Meaning
Choosing Meaningful and Interactive Interventions for Cultural Change
Specific Trajectories for Cultural Change in Organizations
Successful Cultural Change and Leadership
Further Exploration
Part 1 Cultural Change in Organizations
Introduction
Essence of this Part
Structure of this Part
1 Perspectives on Organizational Cultures
Developments in Thinking about Organizational Cultures
Culture as the Identity of the Organization
Culture as a Source of Conflict and Renewal
Culture as a Learning Process
Culture and Customer Value Creation
Culture and Business Idea
2 Reasons for Strategic and Cultural Change
Surviving Crisis Situations
Strengthening Legitimate Position
International Expansion
Qualifying for the Future
Reinventing Business Propositions
Appreciating and Valuing Variety
Breakthrough Innovation
Maximizing Customer Value
Reasons for Cultural Change: An Overview
3 Conclusions of Cultural Change in Organizations
Do not Dare to Call it Cultural Change
Knowing your Meaning and Business Idea
Playing with Urgency and Ambition
Innovation and Expansion as Impulses for Strategic Renewal
Deep Change
Reinventing Business Propositions
Balancing Between Identity and Innovation
Change Starts with Standstill
Discussing the Undiscussable and Playing with Differences
Trajectories for Cultural Change in Organizations
Part 2 Strategies for Cultural Change
Introduction
Essence of this Part
Structure of this Part
4 Generating Energy for Change
Using Crisis as a Driver of Change
Creating a Sense of Urgency
Articulating Problems
Expressing Humiliation and Shame
5 Envisioning
Building Common Ground
Clarifying Ambitions
Articulating Mission Statements
Expressing Levels of Change
6 Creating Commitment
Being There
Bridging Gaps and Distances
Building Leading Coalitions
Organizing Involvement
7 Focusing on Clients
Realizing Customer Value
Redesigning Business Processes
Achieving Horizontal Synergy
8 Combining Upwards and Downwards Initiatives
Generating Creativity for Renewal
Using Power to Force Change
Changing Players and Roles
9 Playing with Time, Space and Rhythm
Playing with Time and Rhythm
Reflecting and Learning
Creating Peace and Quiet
Offering Guidance and Space
10 Conclusions on Strategies for Cultural Change
Basic Principles for Cultural Change
No Single Best Way of Changing an Organizational Culture
Not Every Change Approach is Effective
Step-by-step Change Useful for Cultural Change
Building a Vital Coalition
Change Based on Own Qualities Without Consultants
Part 3 Organizational Culture and Leadership
Introduction
Essence of this Part
Structure of this Part
11 Authentic Leadership
Creating Awareness of the Environment
Inquiring and Understanding Streams of Events
Crafting Self-Awareness and Social Awareness
Walking your Talking
12 Transformational Leadership
Visioning the Future
Articulating Core Values
Building Vital Coalitions
Involving the Outside World
Organizing Teamwork
Appreciating Contrasting Perspectives
13 Meaningful Leadership
Initiating and Sense-Making
Setting Limits and Guiding Change
Giving Direction and Space
Telling Meaningful Stories
14 Appreciative Leadership
Appreciating the Best There is and Might Be
Valuing Differences
Building Trust
Introducing Fair Process
15 Learning Leadership
Experimenting and Learning
Visualizing Results and Sharing Successes
Learning from Mistakes
Sharing Experiences
16 Conclusions of Organizational Culture and Leadership
Leaders and Initiators
Direction and Space
Effective Leadership Styles for Cultural Change
Transformational Leadership
Meaningful Leadership
Authentic Leadership
Episodic Cultural Change and Gradual Cultural Development
Part 4 Interventions for Cultural Change
Introduction
Essence of this Part
Structure of this Part
17 Power Interventions
Articulating Urgency
Setting Borders
Changing Social Networks
Appointing New People
Rewarding Behaviour
18 Structural and Instrumental Interventions
Intervening in Structure and Technology
Designing New Ways of Working
Life Cycle Management for Sustainability
Supporting Young Turks
Providing Risk Capital
Changing Reward Systems
Developing Monitoring Systems
Presenting Facts and Figures
Formulating Rules of Conduct
Using Behaviour Programmes
19 Meaningful Interventions
Expressing Core Values
Visualizing Symbols
Fancying Artefacts
Imagining Futures
Storytelling and Sense-Making
Introducing New Language
Communication All Round
Adopting Cases for Renewal
Appreciating Professional Knowledge
20 Conflict Interventions
Valuing Differences
Discussing Barriers
Mirroring Contradictions and Tensions
Regulating Conflicts
Mediation by Independent Parties
Speaking about the Unspeakable
Using Humour that Stimulates Renewal
21 Interactive Interventions
Getting to Know Each Other
Paying Attention to Action and Emotion
Developing Teams
Bridging Cultural Differences
Engaging Management in Conferences
Initiating Future Conferences
Organizing Search Conferences
Investing in Formal Participation
Supporting Appreciative Inquiry
Introducing Appraisal and Assessment
Using Monitor Systems
Mobilizing Networks
22 Learning Interventions
Creating Learning Environments
Investing in Leadership Development
Offering Workshops
Developing Communities of Practice
Activating Learning Circles
Initiating Twinning
Distributing Learning Experiences
Sharing Successes
23 Conclusions on Interventions for Cultural Change
Interactive Interventions for Deep Change
Meaningful Interventions to Guide Change
Structural Interventions to Reinvent Business Processes
Learning Interventions for Continuous Change
Power and Conflict Interventions to Make Space
Combining Interventions
Interventions and Change Strategies
Effective Intervention Mix
Choosing an Effective Intervention Mix
Part 5 Successful Cultural Change in Organizations
Introduction
Essence of this Part
Structure of this Part
24 Trajectories for Cultural Change
Routes for Cultural Change
Surviving Crisis Situations
Strengthening Legitimate Position
International Expansion
Qualifying for the Future
Reinventing Business Propositions
Appreciating and Valuing Variety
Breakthrough Innovation
Maximizing Customer Value
Inspiration to Change
25 Essentials of Cultural Change and Leadership in Organizations
Don’t Dare Call It Culture
Principles and Success Factors for Cultural Change in Organizations
Organizational Culture and Leadership
Organizing Interactions and Sense-Making
Essentials of Cultural Change and Leadership in Organizations
Bibliography
Index
This edition first published 2013
© 2013 John Wiley & Sons, Ltd
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Library of Congress Cataloging-in-Publication Data
Boonstra, J. J. (Jaap J.)
Cultural change and leadership in organizations : a practical guide to successful organizational
change / Jaap J. Boonstra.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-118-46930-9 (cloth) – ISBN 978-1-118-46929-3 (pbk.) 1. Organizational
change. 2. Organizational culture. 3. Leadership. I. Title.
HD58.8.B647 2013
658.4′06–dc23
2012036586
A catalogue record for this book is available from the British Library.
Cover image: Stepping stones across river, Tollymore Forest Park, County Down, Northern Ireland. Image by © Peter McCabe/Design Pics/Corbis.
Cover design by Simon Levy Associates.
This book is dedicated to all the initiators, inventorpreneurs and leaders who want to make a difference in organizational life and contribute to sustainable change in organizations
Jaap Boonstra is Professor of Organizational Dynamics at ESADE Business School in Barcelona (Spain) and Professor of Organizational Change and Learning at the University of Amsterdam (Netherlands). From 2001 to 2010, he was the Dean of Sioo, an inter-university centre for organizational change and learning in the Netherlands, and is still associated with the institution as a researcher and lecturer. As a consultant, he is currently involved in change processes for international organizations in the Netherlands, Germany and Spain. In 2011, he was awarded the Impact Prize of the Association of Management Consultants for a change project in a youth care institution.
At ESADE, he is involved in master’s courses, executive education and company leadership programmes. At the University of Amsterdam, he lectures master’s and graduate students in management of change, strategic decision making, power and politics in organizations and organizational learning. His research activities focus on transformational leadership, barriers to organizational change and innovation, power dynamics in organizational change and sustainable development of organizations. He has published more than two hundred articles and is the editor of Dynamics of Organizational Change and Learning (Wiley-Blackwell, 2004) and Intervening and Changing (Wiley-Blackwell, 2007).
“Our culture needs to change.” How often do we hear that said in or about organizations? For instance, if a company is in a crisis situation and a deep change is required, or if the collaboration following an international merger simply won’t get off the ground, or if the future of an organization depends on working in a more customer-oriented way and on innovative behaviour. Without cultural change, it is not possible to achieve successful strategic change. But cultural change is not that easy. In practice, goals are often not achieved, and cultural change processes get bogged down without producing any results. How can leaders tackle cultural change successfully, what are meaningful change strategies and which interventions are effective?
The Foundation for Management Studies commissioned a team of researchers to carry out an in-depth, two-year investigation into nineteen organizations that had recently successfully achieved a major strategic change. The result is in your hands: a book with an unprecedented abundance of stories and experiences that have resulted in new insights and recommendations for deep change in organizations.
Cultural change in organizations is not a goal in itself but is for the strategy of the business. This means that there is a continual dialogue with all parties concerned about the role of the company culture in achieving the strategic change. The best chance for successful change comes from giving meaning and value to the company, and to what the company wants to mean for customers and for society. Another interesting outcome of the investigation was that leadership in cultural change is not reserved for the top of the company. The cases described also show examples of important cultural changes that have been set in motion and carried by managers at lower levels, by professionals or employees who believe that things are going wrong or who feel their professional honour is challenged. Successful leadership in cultural change is connected with passion and a vision of the future and not with the formal position in the company. This book establishes links between the reason for the change, the most suitable change strategy, the style of leadership and the interventions for steering the change in the right direction.
Many people have contributed to this study. I would first like to thank all those who collaborated in the study and were so open-hearted about changing their organizational cultures. Their experiences and insights form the basis of this book. The members of the research team carried out investigations at the companies with precision and dedication, gave insights as feedback to the discussion partners and wrote wonderful stories about the changes in specific organizations. The collaboration in the research team provided a stimulus to tackle this adventure together and bring it to a good conclusion. I am also very grateful to the Foundation for Management Studies for funding and supervising the study. The members of the supervisory committee were exceptionally helpful in arranging access to the companies, discussing the interim results and in the writing of this book. The challenging and stimulating exchange of ideas during the meetings about the research was very valuable.
The work has been done; now it is up to you to get going with the insights from this book. I wish you much success with initiatives you take to strengthen and change the culture of your organization.
Jaap Boonstra
Amsterdam/Barcelona, Summer 2012
The research for this publication and the English edition of this book is supported by the Foundation for Management Studies, The Hague, Netherlands.
This book deals with cultural changes within organizations. Change can be driven from within companies. It can also result from the need to adjust to external pressures in a changing environment. Organizational culture is related to the identity of an organization and reflects the values and purposes of the organization, which play an important role in shaping the future of the organization. Successful cultural change is intertwined with strategic change. This book presents strategies and interventions for cultural change in organizations, which deal with the following questions:
This book offers inspiration, practical advice and suggestions for realizing cultural changes within organizations, and a way to effectively combine and organize diverse insights for strategic and cultural change. It provides orientation for people who want to travel to the rough and broader terrain of cultural changes in organizations. Inspirational stories and practical insight into successful organizations are combined with conceptual perspectives and descriptions of useful change strategies and sensible interventions. In this book, you will find stories and learning experiences from organizations successful in strategic and cultural change. Learn from the successful international collaboration of KLM and Air France and the international expansion of the engineering company Arcadis. Discover how Ahold, Philips and KPN overcame a crisis and qualified themselves for the future. Understand how temporary staffing agencies of USG People survive in a competitive market by continuously focusing on customer value. Read how 3M stimulates innovations and how Rabobank used Internet technology to redefine themselves to customer needs as the core of their financial services. Let yourself be inspired by the stories of Amazon and Dutch Railway Services and how they improved their services and increased customer satisfaction. Read about youth care and health care institutions and how they succeed in realizing a customer-centred approach. Share the learning experiences of a metropolitan Police Force and discover how they invest in diversity to create a trusted police force in a multicultural society. Read the stories of the Ministry of the Interior and the City of Amsterdam and how they have prepared for the future in a turbulent environment.
Part 1 offers an overview of different perspectives on cultural change in organizations. This comprehensive perspective is helpful in taking a wider perspective on strategic and cultural changes in your organization. Cultural change is no longer perceived as a planned or programmed effort to change the behaviour of employees and managers within the organization. Companies that are successful in cultural change do not even use the words “cultural change”, and they refrain from programmed behavioural change. They focus on the identity of the organization, the basic assumptions and the business idea. Cultural change is not an aim in itself; it is focused on realizing the business idea and delivering customer value. The business idea as a new perspective on organizational culture is illustrated in the following figure:
Change initiators bring people together with inspirational vision, developing the central business idea and moving their organization to meet the future.
Part 2 shows how to initiate and guide cultural change in organizations. It offers many examples of how organizations are successful in their change strategy. There is no one best way to change an organization. This part helps you to choose the right change strategy, to think through the way forward and to keep thinking as you move. Successful cultural change requires seeing beyond the current range of vision. Strategic conversations are helpful for interpreting the present and developing scenarios for the future, using storylines and imagination. Leaders in cultural change refrain from top-down planned change approaches. Cultural change is an interactive process for making sense. Leaders in cultural change mainly choose a continuous change strategy. They involve people on all levels in the organizations and invite customers to share their ideas for the future. A participatory approach is combined with an interactive approach. Leaders in change are not afraid to use their positions to express that which is unacceptable. By visioning the future and articulating non-values, they guide the change process in a desired direction. Basic principles for cultural change strategies are:
Changing step by step in a conscious and continuous way is most successful for cultural change in organizations.
Part 3 articulates the role of leadership in profound changes. Leaders in cultural change are initiators who create meaning and set the pace. They question existing patterns and open up new perspectives. They invite people to build vital coalitions and initiate change. There are different types of change. Top management can only bring about creating a new corporate strategy, but other people in the organization can take the initiative in articulating the need for change or pointing out possibilities for innovation. Cultural changes are not always driven by top executives. Individuals in every role or position can take initiatives for cultural change. It is not unusual that professionals take initiatives for change because they feel their professional pride has been injured, or that employees set the pace due to a sincere feeling that things can and should be done differently. Significant cultural change cannot possibly be done when it is driven by only a handful of people at the top of an organization. Values are only guiding values when they are chosen voluntarily. In cultural change, an organization builds its capacity for doing things in a new way. Cultural change is connected to the strategy, the structure and the systems of an organization as well as with existing patterns of collaboration and the values, aspirations and behaviour of people within the organization. Cultural change is not possible without personal transformation. Part 3 also explores what leaders do, which of them are successful at cultural change in organizations and how they work with the forces that shape change. The examples and insights are based on the behaviour of leaders in the sixteen case studies on cultural change. The transformational leaders in these organizations are sensitive to values in our society and aware of changes in the environment of the organization. They know what is going on in the organization and have a highly developed social antenna. They have a profound degree of self-knowledge and are able to contain their own ego. Leaders in cultural change bring meaning to unexpected events and unclear situations. They take the lead in crises, form a leading coalition to solve problems and envision future perspectives. They are explicit about what is important for the organization, what they value and also about that which they do not want to happen. They interact and invite others to participate in change. They share perspectives, set borders, build trust and give space to others to experiment and appreciate initiatives that contributes to success.
Part 4 presents a practical methodology by describing more than fifty interventions to nurture and sustain ongoing cultural changes throughout the organization. Deep changes in the way people think, what they believe, how they see the world and how they behave require a dedicated mix of interventions that fits the context of the organization and the purpose of the change process. In crisis situations, top management articulates problems, makes sense of the situation, gives direction and formulates principles that guide the change process. Without crises or immediate threats, and in situations where organizations want to qualify for the future, the most widely used set of interventions are interactive interventions that stimulate people to question existing patterns and underlying values. Interactive interventions are used to build common ground, envision the future and take action. Structural interventions used to change organizational structures and technological systems turn out to be useful in realizing changes in coordination, patterns of collaboration and work practices. New work practices guide changes regarding how things are done and stimulate dialogue about existing patterns and underlying assumptions. Sometimes leaders in cultural change use power and conflict to create energy for renewal. These interventions are usually used to make a breakthrough in existing and destructive patterns, to create space for innovation and to relieve emotional tensions. Interventions based on power are used sparingly, and the structural and power interventions are always used in combination with interventions that create interaction, meaning and engagement.
Success factors and success actors in cultural change.
Part 5 contains conclusions and reflections on successful cultural change in organizations and throws light on the importance of leaders in these changes. There is no one best way to realize cultural change in organizations. Eight specific drivers or trajectories for cultural change might be distinguished, and every trajectory needs a deliberate change approach with a thoughtful leadership style and a methodological set of interventions. The eight trajectories are reflected in following figure:
The challenges inherent in the trajectories for change, tax our collective abilities to deal with them. They require people who take initiatives and guide strategic and cultural change in organizations. The ambition to create a desirable future is more important in creating cultural change than a sense of urgency. The business idea of an organization faces strategic and cultural changes, and this challenges the mental models and forces behind its current and future success. An articulated business idea is embedded in the language of organizations. It is connected to the identity of the organization and it strengthens the way things are usually done in the organization. Cultural change focuses on basic assumptions and the identity of the organization. It challenges patterns of collaboration and the way things are done there. Cultural changes in organizations broaden the scope for realizing transformational change and create customer value.
The concluding chapter presents a comprehensive overview of conditions and success factors related to the specific trajectories for cultural change. The most important factor for success is to consider the context and purpose of change and to choose your change approach and interventions deliberately. The most important actors for success are the people in the organization who take the lead independently of their role or formal position. These initiators have the courage to explore and discuss the existing situation, to articulate a desirable future, to build a vital coalition, take action and guide the change process. The general success factors for cultural change are:
Other factors for successful cultural change are dependent on the context of the organization and connected to the drivers for change and the specific trajectories.
The examples and concepts in this book are a source of inspiration for leaders in cultural change in organizations. The change strategies and interventions presented may be used as a practical methodology for cultural change. This book can be explored by reading the examples of successful organizations at the beginning of each paragraph. By focusing on Parts 2 and 5, it may be used as an insightful guide to choosing a change strategy. The reflections on leadership in Part 3 may be helpful in choosing your own role in profound changes and inviting others to contribute in cultural change. Exploring Part 4 as a reference book may be helpful in considering specific interventions. The practical insights in this book and the extended stories of successful organizations may help you and other people in your organization to be successful in strategic and cultural changes in organizations.
This part describes how successful businesses regard their organizational culture and the motives for them to change their culture. Many businesses regard culture as the identity of their organizations. This view of culture that developed 30 years ago still has value today. Businesses also see culture as a learning process. In recent years, there is also awareness for differentiated cultural values as a source of conflict. These tensions between existing cultural values may be a source for renewal and innovation. This new perspective regards conflict as a source of radical renewal. The culture of organizations is inextricably connected to the strategy, structure and systems of the organizations. More than ever, the meaning for customers is the key element. Leaders who choose for strategic and cultural change in organizations choose a change process in which the values for customers, employees and external partners are increasingly clear. Leaders play an essential role in this process of value creation and giving of meaning.
This part is interesting because it sheds light on different ways of looking at organizational culture. This multiple view helps leaders, managers and employees to choose how they want to work on their own organizational culture. The thinking about cultural change in organizations has changed over the past 50 years, and this too is discussed here. And finally, this part is worthwhile because it describes eight reasons for cultural change encountered in the nineteen organizations that participated in the study on which this book is based. It shows that a crisis situation is not a prerequisite for cultural change, as is often claimed.
Chapter 1 presents a brief description of how thinking about organizational culture and cultural change has changed in 50 years. In this chapter, I describe organizational culture from five perspectives. Culture as the identity of the organization, as a learning process, as source of conflict, as value creation for customers and as business idea for the organization. The most recent view is that organizational culture is connected inextricably to everything that an organization stands by and goes for. Chapter 2 gives eight reasons for organizations to get to work on their organizational culture. These eight reasons are linked together and form related trajectories for cultural change in organizations. In all successful businesses, an increase in customer value is linked to cultural change.
This first part is an orientation in existing theories about organizational culture and takes thinking about changing organizational culture a step forward. The subsequent parts deal with choosing a suitable approach to change, the role of leaders in cultural change and interventions for cultural change. These parts provide practical handholds for changing the culture of organizations.
In this chapter I lay the foundation for the subsequent parts that examine how leaders in organizations work on successful cultural change. Thinking about organizational culture is not new. We can discern four periods in the way we think about organizational culture. In the 1950s, culture in organizations was discovered. In the following decades, much effort was subsequently put into identifying and understanding the culture of organizations. During this period, culture was a phenomenon you could use to explain why organizations found it difficult to change. In the 1980s, it was about the issue of whether managers could make use of the company culture to gain a competitive advantage. The results of that endeavour were meagre. Twenty years further on, businesses renewed their interest in organizational culture. The question then was how leaders could contribute to a culture that tied in with the mission and the meaning of the organization. Culture was no longer isolated as a separate phenomenon nor was it any longer an instrument of management. Culture is inextricably connected to everything that an organization stands by and goes for. This brings culture into the picture as a point of special attention for leaders who want to qualify their company for the future.
The German economist and sociologist Max Weber1 wanted to understand social conduct in organizations. In 1920, he already opposed the arbitrariness and abuse of power that was common in factories and offices at that time. He formulated three core values against these situations of abuse: legal equality, legal certainty and justice. He exposed actions that adhered to tradition and entrenched habits, and formulated new values that were intended to be guiding. He also translated these new values into concrete behaviour. The rules for behaviour especially became well known and criticized in later times. Bureaucracy is discussed derisively, but often people forget that the rules for bureaucratic organizations were drawn up in a time of feudal labour relations with exploitation and arbitrariness. For that matter, Weber proposed an organization based on fairness, and he was also the first person to warn about the drawback of rationalization pushed to extremes because it would imprison people in an iron cage of rules and control. In the same period, Henri Fayol2 emphasized the importance of unity of direction and “esprit de corps”. In an organization, everybody has to aim at the same target and good team spirit is conducive to harmony and solidarity, and essential for reaching those goals. Barnard,3 too, emphasized the enterprise as a cooperative system. He was the first to write about the organization as a personality that employees can identify with. Barnard was an entrepreneur and manager himself, and he tried to use community spirit to improve the collaboration between managers and employees and prevent conflicts.
In the 1950s, Elliot Jacques4 studied organizations as cultural units. He showed that values give guidance to behaviour in organizations and that those values are not directly related to the technical production process itself. He also made evident that a social system can withstand changes due to subconscious fear patterns and group dynamics. In the 1960s, Karl Weick5 presented his vision of organizations that made clear that the organizational culture consists not only of a set of material conditions and events that he could map out objectively but is constructed from interactions in which people give meaning to events. This creates pictures of reality that guide behaviour. From the 1980s, there was suddenly a lot of attention for the culture in organizations. Andrew Pettigrew6 proposed that myths, symbols, rituals and language are practical and useful for analyzing and understanding an organization. His research showed that an organization can have several sub-cultures that are connected to the position in the organization, the professional background of people or the nature of the work. In one of the first studies into the culture of organizations, Deal and Kennedy represented the organizational culture as a layered model. The culture is formed in the history and gains meaning and is visible in the daily work practice and the entrenched patterns: “This is the way things get done around here” (Figure 1.1).
Figure 1.1 Organizational culture as a layered model. (Source: Based on Deal and Kennedy7.)
In this cultural model, the core of a company culture is formed by the history in which all kinds of convictions and core values arose in the survival of a community. A core value is something that people see as a generally positive characteristic of their behaviour. Many values are already made at an early age and are therefore usually implicit. The third ring concerns rituals and ceremonies. This involves collective activities that have an individual meaning, such as drinking coffee together at the start of the day or giving praise for good performance. These rituals result in entrenched patterns that people are scarcely aware of. These rituals and entrenched patterns are often fostered by heroes and the stories that circulate in the organization. The heroes are the role models imitated by others. Directors can be role models, as can the founders of family businesses, but successful colleagues can be role models too. The outermost ring of the model consists of symbols and artefacts. They include specific use of words, company style and external characteristics such as clothing. The values, rituals, heroes and symbols gain meaning in the daily work practice.
In the 1980s, Harrison,8 Handy,9 and Deal and Kennedy7 provided profiles of organizational cultures. The studies have an anthropological nature. The studies concern discovering and describing the organizational culture as an element of an organization. You can understand organizations better if you also examine the culture in them. It is not only about diagnosing the production technique, the working methods, the structure and the strategy but also about forms of conduct and work practices. The profiles of organizational cultures help in the diagnosis of the cultural characteristics of a specific organization and enable us to explain apparently irrational behaviour. The profiles are also used to reflect on the existing and desired culture and work out which transition is possible (Figure 1.2).
Handy states that every organization has certain values and follows some policies and guidelines, which differentiate it from others. The principles and beliefs of any organization form its culture. The organization culture decides the way employees interact amongst themselves as well as external parties. In the power culture only a few people are authorized to take decisions. These individuals further delegate responsibilities to the other employees. In this kind of culture the employees do have limited liberty to express their views or share their ideas and have to follow what their superior says. In a task culture, teams are formed to achieve the targets or solve critical problems. In such organizations individuals with common interests and specializations come together and contribute equally and accomplish tasks in the most innovative way. In a person culture, individuals are more concerned about their own roles and ambitions rather than the organization. Employees are interested in each other and develop professional friendships to achieve personal goals. Role culture is a culture where every employee is delegated roles and responsibilities according to his specialization, educational qualification and interest to extract the best out of him. In such a culture employees decide what best they can do and willingly accept challenges.
A breakthrough in thinking about organizational culture came in 1982 with the book In Search of Excellence by Peters and Waterman.10 In a period of economic downturn in which some companies came off badly while others survived, their book was a real eye-opener. Peters and Waterman saw culture as a separate part of the organization. It is the managers’ task to shape the culture and bend it in the right direction. They ascribe the success of businesses to eight success factors:
Figure 1.2 Four culture profiles for organizational culture. (Source: Based on Harrison8 and Handy9.)
A specific line of approach to culture involves the differences between company cultures in different countries. Geert Hofstede became known for his research into national differences in organizational culture. Hofstede11 distinguished between five dimensions in which the culture of organizations can differ internationally. He showed that national and regional cultures influence the behaviour of people in organizations. This behaviour and the daily practices form the ways that people deal with each other within organizations. His observations are useful for international collaboration and mergers between companies from different countries (Table 1.1).
Table 1.1 Dimensions of national cultures.
Source: Based on Hofstede11,12.
| Power distance | The extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally. Cultures that endorse low-power distance expect and accept power relations that are more consultative or democratic. People relate to one another more as equals regardless of formal positions. In high-power distance countries, less powerful accept power relations that are more autocratic and paternalistic. Subordinates acknowledge the power of others simply based on where they are situated in certain formal, hierarchical positions |
| Uncertainty | The extent to which members of a society attempt to cope with anxiety by minimizing uncertainty. People in cultures with high uncertainty avoidance tend to minimize the occurrence of unknown circumstances and proceed step by step by planning and by implementing sociology, laws and regulations. In contrast, low uncertainty avoidance cultures feel comfortable in unstructured situations or changeable environments and try to have as few rules as possible. People in these cultures tend to be more pragmatic; they are more tolerant of change |
| Individualism–collectivism | The degree to which individuals are integrated into groups. In individualistic societies, the focus is on personal achievements and individual rights. People are expected to stand up for themselves and their immediate family. In contrast, in collectivist societies, individuals act predominantly as members of a life-long and cohesive group or organization. People have large extended families, which are used as a protection in exchange for unquestioning loyalty |
| Masculinity–femininity | The distribution of emotional roles between the genders. Masculine cultures’ values are competitiveness, assertiveness, materialism, ambition and power, whereas feminine cultures place more value on relationships and quality of life. In masculine cultures, the differences between gender roles are more dramatic and less fluid than in feminine cultures where men and women have the same values emphasizing modesty and caring |
| Long-term–short-term orientation | The time horizon of a community. Long-term-oriented societies attach more importance to the future. They foster pragmatic values oriented towards rewards, including persistence, saving and capacity for adaptation. In short-term-oriented societies, values promoted are related to the past and the present, including steadiness, respect for tradition, preservation of one’s face, reciprocation and fulfilling social obligations |
There is more hierarchy in France and India than in Hong Kong and Denmark. The United States and England are more oriented towards the individual than Spain and the Netherlands, where a collectivistic culture dominates. The northern European countries emerge as relatively feminine. Anglo-Saxon companies have a short-term orientation while businesses in Asian countries, like China, have a long-term orientation.
After the 1980s, things got quiet again around organizational culture. The promises of cultural change were not fulfilled and businesses turned their attention more to flexibilization, redesigning business processes, mergers and takeovers, innovation and the use of new information technology. For a few years now, businesses have been showing new interest in cultural change. Businesses know how to map out culture, and from their own experience they know that simple recipes and large-scale programmes for cultural change do not work. The question at the top of the list now is how leaders manage to get change going in which their business retains its identity and in which they stimulate renewal at the same time?
In the continuation of this chapter, I will describe culture firstly as the identity of the organization. I see culture in the second place as the development of entrenched patterns and “the way things get done around here”. Thirdly, I will discuss culture as conflicting values that can be a source of renewal. Then I consider the organizational culture as value creation for customers. Finally, I describe the organizational culture as the business idea of the organization. The five views about organizational culture do not exclude each other but rather complement each other. Changing an organizational culture affects the identity of the organization, interferes with entrenched patterns, reveals conflicts, aims at realizing customer value and contributes to the business idea. I can already reveal one conclusion from my research on cultural change in organizations: not a single leader in the companies talks about cultural change explicitly. Nevertheless, they do have success with cultural change, perhaps precisely because they do not talk about it but act accordingly.
Culture as an identity and personality points to deeply rooted characteristics of an organization. It also tells something about the strength of an organization and its peculiarities. In this concept, an organizational culture consists of stable fundamental assumptions about human cooperation, mutual relations and the relationship between organization and surroundings. It concerns opinions about what does and does not work, what the surroundings look like and how a business deals with that.
Schein sees the organizational culture as a social process in which people construct meanings together. Schein defines an organizational culture as:
A pattern of shared basic assumptions that was learned by a group 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.
In popular terms, culture is the way people do things and get on with each other. They form, share and carry the organizational culture. The culture is picked up in the day-to-day practice and is not immediately evident nor can it be influenced directly. The culture is enduring, stable and difficult to influence.
The identity of an organization has several levels. The most firmly rooted are the basic assumptions. These basic assumptions form the foundation for values and norms about what is right and what is not right. The values and norms are nourished by stories and myths and the way people work together and develop knowledge. Many businesses formulate core values that guide behaviour. The most visible level of the identity is formed by the symbols and artefacts. This concerns use of language, company style, clothing style and the style of management (Figure 1.3).