Many scholars have dealt with the change of organizational culture - PDF document

TLADERSHIPThe role of the leader has a determinant influence increating and changing corporate culture. This is achieved bydefining behavioral norms and decision-making methodsand through decisions influencing the value system.Studies examining the role of the leader conclude thesignificant impact of the leader in shaping corporate culture.Schein and also Nahavandi and Malekzadeh noticed acultural creator role of the leader, when founding anorganization. [2][3]Schein criteria, which measure, whether the leader reallyhad a definite impact on the culture, are the following:the organizations size had increased. In the concept which I will use further on, the role of theleader is determinant in the creation of culture. Culturalestablishments, laid down by the leader, very often outlastthe person. However, success stories are needed to validatethe culture. These success stories are built in the valuesystem of the organization, to have something to lean on intime of crisis and problems. A long lasting culture strongly determines what kind ofleaders will be accepted in the future. A strong culturerejects leaders and organization members who do not fitthe culture. However, if the culture should come to a crisisin its own self-development, a cultural leader is needed whois able to change the basics of cultural features and elementsof the value system. This situation calls for atransformational leader. For cultural changes of this kind acharismatic person is needed, who is able to recruitfollowers by representing the values of the visionaryculture, with help of his/her personal characteristics andleadership abilities. Possible means for changing organizational culture arethe following, (not distinguishing the mechanisms offounding and changing):1. Role modelsFounders and leaders are behavioral idols in the eyes of themembers of the organization. They serve as a role model forthem. The declared culture is approved by their actions andbehavior on a daily basis and thus becoming beliefs sharedby everybody.2. Decisions directly influencing the value system Here I refer to those decisions, which can serve as guidelinesfor the members of the organization, such as the rewardsystem and personnel recruitment. Both devices areimportant in case of founding and changing the culture ofthe organization. These devices have a less direct influencethan the one mentioned above, though they have the samelevel of impact. On the other hand, whereas the leader as arole model can only influence the culture passively, with theuse of these devices the leader is able to actively guide thenorms and shared values into the direction (s)he desires.The role of personal characteristics is also essential here,which is even unintentionally enforced by him/her inpersonnel recruitment. 3. The methods of decision-makingThe way decisions are made by the leadership has a longlasting effect on the operation of the organization. Thisapplies for any stage of cultural development. The ways ofdecision-making could be defined as expectations, but canbe generally expected methods to follow as well. Theirimportance could be traced when methods outlast the leaderand within changing environmental conditions can serve assupport or as impending factors in decision making. Included here are decisions regarding the change of strategyand structure, which similarly influence the shaping ofculture. Because of the interdependence of strategy,structure and culture, the influence on culture is presenthere as well, however less obviously than above. OOGANIZATIONALARACTERISTICSThe ownership structure, size of the organization and thegiven branch of industry all play a major role in thetransition of the organizational culture. Shared values of theorganization are often undermined by external economicand social influences.When the results of the above mentioned study wereevaluated, the companies were grouped according to thethree aspects included in the hypothesis:Organizational size (number of employees)Ownership andBranch of industry (production or service oriented)OOGANIZATIONMBERSThe organization members of any corporation are the oneswho really suffer from changes and also they are the oneswho put the ideas into action. In the short run they areunchangeable factors of the change process. In the longerrun there is possibility for the change their attitudes and wayof thinking … as central elements of any cultural change …but in a short term it is wiser to analyze the memberswillingness for change. (Those ones without any willingnessto change should be replaced in the longer run of course.)The employees as the human resources of the organizationvery much determinate the direction of change with theirskills, abilities and motivation potentials.The proper shaping and stabilizing of the shared values inan organization must play a key role in any kind of programaimed at changing cultural values.The company has toprovide the stable organizational values as a reference point,which serves as a guideline for the employees in uncertainsituations and in problem solving. 10 Club of Economics in Miskolc STTRRAATTEEGGYYAANNDDSSTTRRUUCCTTUURREEThe long known interdependence of strategy-structure-culture makes the strategy of any organization a determi-nant factor in a cultural change of any kind. The culturalchange process is very often developed as a side factor to theoverall strategic change program. Either ways, it is certainthat, just as in case of structure, culture cannot be managedseparately from the strategy of any time. It is unrealistic toexpect organization members to follow new mission andgoal alongside with the old values and beliefs. Whendreaming the Žstrategic dreamŽ the cultural blanket shouldbe really considered. The organization should fit theculturally defined blanket unless the dream will become astrategic nightmare. The best way to manage the two factorssimultaneously and not in a sequential way. Strategy mustbe consistent to culture and vice versa.The relation between structures and cultures are also longknown. It is not the objective of this study to deal with thecultures created by the different structural forms and alsowith cultures that rejects certain structures. The change oforganizational structure immediately initiates changes inculture. New departments are born, old ones are dying, andthus new grouping of people is constructed. Within the newstructure organization members have to find new ways ofcommunication and communicate and interact withdifferent people. That necessarily leads to changes in culture.TTHHEEFFEEAATTUURREESSOOFFCCUULLTTUURREEThe apparent contradiction between strong cultures and thechange of organizational culture can be solved. It is possiblefor a strong culture to be formed that is friendly to change,and whose fundamental value is the ability to change.Importantly the distinction between strong and weakculture is not a qualitative one. It depends highly onorganizations and the environment. The approaches mentioned above measure strength accord-ing to one dimension. The question can be easily translatedto a more complex environment. Organizational culture mustbe examined in its business and social embeddedness. Thisrefines the issue and further shapes the question.The stage of the change process in which the organization isand what methods have been used to support the changeprocess also matter. Besides the causes of organizationalhistory, market position in the given business and thedevelopment tendencies of the country have a stronginfluence on the organization. What is important for the leadership is that the presence ofstrong culture does not mean its unchangebility. If the central values … except those to be radicallychanged … are properly managed, they can even serve assupporters for change. A smart leader has the opportunity touse these basic values and beliefs as a commonly shared andaccepted starting point, and build a program of incrementalchange on it. Many companies have the advantage of possessing aculture in which of change and the ability to change arecentral values.Most of the time this is the result of their corporate history,since companies that were never market leader were forcedto adopt follower strategies. This market behavior plantedthe openness and ability to change into their culture. Andeven nowadays when many of them are market leaders, oneof their competitive advantages is this ability which enablesthem to react more quickly to market changes.The task of the leadership is to stand clearly for thecontinuity of the values not hindering change, thusencouraging change in those resistant to change.Emphasizing the positive values of the past makes changeseasier in other fields as well. Thus the culture does not loseits strength and the ability to change can be built in. Toachieve this ideal situation, a sequence of leadershipinterventions and fine-tuning are necessary.Strong culture therefore is not necessarily the obstaclefor changes, even when it contains many and intenselyshared assumptions and values.If the leader succeeds in building sensitivity and ability tochange into the central elements of the value system, theculture can be transformed into one friendly to change.Change friendly organizations with strong cultures arebetter off then the less homogenous ones.NNAATTIIOONNAALLCCUULLTTUURRAALLBBAACCKKGGRROOUUNNDDThe result of organizational development programs isderived from two sources. Besides the definedorganizational objectives, the influence of national culturalbackground is also important. These two can have oppositeinfluences on the organization.A twofold impact is seen in the implementation oforganizational change and development programs. Thewell-defined objectives and activity plans of topmanagement work from top to bottom. National cultureworks the opposite direction, from bottom up. Thisnational cultural background is one of the obstacles toorganizational changes in Hungary.THENOTIONOFANDITS Club of Economics in Miskolc 11 process and its operational conditions. It is not only amanagement task, but the roots of national culture play anequally important role in the M&A process. The socialenvironment in which the organization operates has adeterminative influence on the methods-in-use. Therefore,beside the obvious internal and external factors, socialembeddedness of the organization must be considered tothoroughly understand its market behavior and the role ofcultural values in the process.�The organizations social components include such aspects asHow company executes complex coordinationfunctions involving both internal andexternal resources?How it develops critical networks and learnswithin its community?How its people communicate and collectivelyfoster a social sense of identity? [4]The importance of these skills increases, when resources mustbe coordinated in M&As within diverse national culturalframework. This knowledge is almost impossible to copy bycompetitors, it can only be gained through experience. Itsuniqueness is derived from the co-ordination mechanisms,which operate in diverse cultural barriers, and are only validwithin a holistic perspective. This includes the knowledgeitself and is surrounded by cultural symbols, metaphors andnorms. All this is captured by the notion of the Greekexpression called gnosis.In case of companies, this gnosisprovides the pragmatic skills and knowledge, which every firmhas to possess to stand the fierce competition and the culturalenvironment, in which the firm experienced under whichconditions the knowledge works. This gnosis cannot bebenchmarked it must be learned the hard way. (It is notcoincidental that companies with decades of internationaloperational experiences seem to face less cross-culturalproblems than their Japanese and Korean competitors.)The internal and external condition of acculturation issummarized on Figure 2.QUESTIONSREGARDINGCULTURALASPECTSOF 12 Club of Economics in Miskolc EExternal… Market opportunites… Market constraints … Cultural symbols &metaphors FFirm A nternal… Resources… ProcessesFFirm B nternal… Resources… Processes DOOUUBBLLEEAACCCCUULLTTUURRAATTIIOONNBased on experimental research many scholars argued thatcross-border dimensions of M&As are further managementchallenge. [4][6][7] It is interesting to note however that British and Americanscholars pay less attention to problems of cross-border co-operations. Many of them simply ignore these conflicts andproblems or consider it overemphasized. In their point ofview these transactions are still conflicts and collaborationsof organizational cultures. Nahavandi and Malekzadeh 13 Organization-wideSubcultural consensusMultiplicity of viewsconsensus(no consensus)ConsistencyInconsistencyComplexityExclude itChannel it outside Focus on itClearing in jungle,Islands of clarityWeb, junglemonolith, hologramin sea ResümeeDer Artikel forscht den akkulturellen Prozess in dem Hinsicht derVeränderung der Organisation Kultur. Erste mal wurde ein aufempirischen Forschung beruhene Modell für die Veränderung derKultur demonstriert. Alle Faktoren des Modells wirken auf dieVeränderung der Organisation Kultur, obwohl nicht gleichzeitigund nicht in gleichem Masse. Die Wirckungs Faktoren sind dieLeitung, die Mitgliedschaft, die Charakteristik der Organisation,die Nationalkultur, die Strategie und die Struktur und dieParameter der Organisation Kultur. Der Autor demonstriert denBegriff des akkulturellen Prozesses als ein typische veränderungsProzess, sowie kulturische Fragen, die bei der Verschmelzung undbei dem Aufkaufen (M&A) entstehen können. Die Wirkung derNationalkultur in dem akkulturellen Prozess ist bedeutend.Schliesslich erscheint sich die Bestrebung auf die kulturelleSynergie als eine strategische Frage.ÖsszefoglalóA cikk az akkulturáció folyamatát a szervezeti kultúra változásaszemszögébôl vizsgálja. Elôször egy empirikus kutatáson alapulókultúraváltozási modellt mutat be. A modell tényezôi mind hat-nak a szervezet kultúrájának változására, bár nem egyszerre ésnem egyforma mértékben. A ható tényezôk a vezetés, a szervezetitagság, a szervezeti karakterisztika, a nemzeti kultúra, stratégiaés struktúra és a szervezeti kultúra jellemzôi.Az egyik jellegzetes kultúraváltási folyamatként a szerzô bemutat-ja az akkulturáció fogalmát, valamint az összeolvadásokban ésfelvásárlásoknál (M&A) felmerülô kulturális kérdéseket. A nem-zeti kultúra hatása az akkulturációs folyamatra jelentôs. Végülmegjelenik a kulturális szinergiára törekvés, mint stratégiai kér-dés. Club of Economics in Miskolc 2.SCHEIN, E..: 3.NAHAVANDI,A.-MALEKZADEH,A.R.4. MOROSINI, P7.VERY,P.- LUBATKIN, M.-CALORI,R.: 8. CARTWRIGHT, S.-COOPER, C.L.-JORDAN, J.:9. VAARA. E.: , Vol.3., 2000, pp.81-110)10.LARSSON, R.-RISBERG,A.:11. MARTIN, J.: 12. VAARA, E.: 14.HEIDRICH, B.: However the influencing factors it defines are moreuniversal.The phenomenon of acculturation is introduced as well.The merge or acquisition process is a specific form ofcultural change. Therefore, first the cultural change modelis dealt with and further on the environmental andorganizational aspects of the acculturation process isintroduced. THEMODELOF 9 ENVIRONMENTAL AND ORGANIZATIONALFACTORS OF MERGERS AND ACQUISITIONSAcculturation as a Cultural Change ProcessB, PHAssociate ProfessorSummaryFirst a cultural change model was demonstrated, which tried to focus on both internal and external factors, which could have T eadership ational Culture trategy and Structure ea rganizationMMe rganizational Characteristics((size, ow Figure 1.