Culture Change
This post gives me the chance to carefully consider an issue of organizational culture that I have wanted time to ponder: the process of creating a new corporate culture during a time of radical change. This could include mergers, acquisitions, or turnarounds.
Just as there are times of market failure in the macro-economy, there are culture failures in the macro-organization of the corporation. These periods come when there is significant change or volatility in either the external or internal environments. This usually comes in the form of a shock to the system such as a merger, acquisition, or significant competitive change brining on the need for a turnaround. These shocks mark the trigger event for reevaluating the organization’s culture and initiating a change process when necessary.
A trigger event would conceivably include the decision to merge with or acquire another company, including people and capital. It could also include the reporting of significant negative results from ordinary business activities. These negative results would signal a marked change in the competitive landscape, and it is likely that other triggers could be used that would signal that change before the end of period reports, e.g., the entry of a large competitor into a market your firm participates in.
Often the trigger events are identified in the strategic planning process. The trigger signals a time of reevaluation of the firm’s strategy, including product mix and positioning, organization structure and talent, and, hopefully, culture. While product mix, product positioning, organizational structure, and even, to some extent, organizational talent are fairly well understood and can be evaluated and planned for; organizational culture is poorly understood and often overlooked as unquantifiable or unchangeable.
Because of the implicit and tacit nature of organizational culture, evaluating culture usually consists of ethnographic surveys and studies, including observing activities and environment, as well as gathering organizational narratives in order to unearth deeply seated values. One model from organizational psychology uses the above methods to begin to create an image of the shared “mental map” of how the organizational behaviors reflect the values the organization espouses. This is one of the best understood techniques for understanding organizational culture, but it is slow and difficult to implement and manage and may not be the best option for quickly shifting the organization to adapt to the changes brought on by the trigger event.
Future research should probably focus on what organizational structures and processes might make this process faster and easier to accomplish. This would also be an important component to creating a more flexible organization to compete strategically.
The culture change process usually centers around one principle, changing the shared behaviors the organization believes reflect their core values. There are a number of approaches to this issue depending on whether the change effort is top-down or bottom-up. The most common approach is to change the organizational structure and environment in order to force different activities. With different stimuli, rewards, and punishments it is expected that the people will behave differently and thus culture will change. This is the view put forth by proponents of rezoning during an urban revitalization effort and the proponents of organizational redesign in times of corporate change. Alternatively, the change can be made though changing the organizational narratives to reflect new behaviors for the espoused organizational values.
Just as there are times of market failure in the macro-economy, there are culture failures in the macro-organization of the corporation. These periods come when there is significant change or volatility in either the external or internal environments. This usually comes in the form of a shock to the system such as a merger, acquisition, or significant competitive change brining on the need for a turnaround. These shocks mark the trigger event for reevaluating the organization’s culture and initiating a change process when necessary.
A trigger event would conceivably include the decision to merge with or acquire another company, including people and capital. It could also include the reporting of significant negative results from ordinary business activities. These negative results would signal a marked change in the competitive landscape, and it is likely that other triggers could be used that would signal that change before the end of period reports, e.g., the entry of a large competitor into a market your firm participates in.
Often the trigger events are identified in the strategic planning process. The trigger signals a time of reevaluation of the firm’s strategy, including product mix and positioning, organization structure and talent, and, hopefully, culture. While product mix, product positioning, organizational structure, and even, to some extent, organizational talent are fairly well understood and can be evaluated and planned for; organizational culture is poorly understood and often overlooked as unquantifiable or unchangeable.
Because of the implicit and tacit nature of organizational culture, evaluating culture usually consists of ethnographic surveys and studies, including observing activities and environment, as well as gathering organizational narratives in order to unearth deeply seated values. One model from organizational psychology uses the above methods to begin to create an image of the shared “mental map” of how the organizational behaviors reflect the values the organization espouses. This is one of the best understood techniques for understanding organizational culture, but it is slow and difficult to implement and manage and may not be the best option for quickly shifting the organization to adapt to the changes brought on by the trigger event.
Future research should probably focus on what organizational structures and processes might make this process faster and easier to accomplish. This would also be an important component to creating a more flexible organization to compete strategically.
The culture change process usually centers around one principle, changing the shared behaviors the organization believes reflect their core values. There are a number of approaches to this issue depending on whether the change effort is top-down or bottom-up. The most common approach is to change the organizational structure and environment in order to force different activities. With different stimuli, rewards, and punishments it is expected that the people will behave differently and thus culture will change. This is the view put forth by proponents of rezoning during an urban revitalization effort and the proponents of organizational redesign in times of corporate change. Alternatively, the change can be made though changing the organizational narratives to reflect new behaviors for the espoused organizational values.
posted by Burke Powers at 8:46 AM
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