THE ORGANISATIONAL CULTURE IS CHANGING

OUTLINE

The hardest thing a manager has to do is change the corporate culture. The common values held by individuals within an organization are shaped over time by their frequent interactions with one another. Within the current organizational culture, employees form comfort zones, and it might be challenging to push them outside of them. It's critical that managers are dedicated to implementing the cultural changes they want to see in order to transform the culture of the company. To paraphrase Mahatma Gandhi, Make the kind of change you wish to see in the world. Making adjustments at lower levels would therefore be challenging if the people at the top remained the same.

Organizational culture is evolving

In the current fast-paced business landscape, companies who are unable to adapt quickly to environmental shifts will fall far behind in the competition to become industry leaders. No company can be proud of maintaining a status quo or consistent corporate culture. Nowadays, stability is more often associated with stagnation than with steadiness. An organization needs a flexible culture that can quickly adjust to changes in the environment in order to obtain a competitive edge. One key factor contributing to Apple Inc.'s competitiveness, for instance, is the company's inventive culture, which places a strong focus on the launch of new products.

Products like the iPhone, iPod, and iPad are the outcome of not just a talented group of engineers but also an inventive culture that is deeply ingrained in the organization's ethos.

GE, under Jack Welch's leadership, is another example of increased performance and efficiency through culture change. The business's performance plateaued in the start of the 1990s.

Operational efficiency, cost efficiency, and quality are the main drivers of a manufacturing organization's excellent performance. But GE didn't have any of these performance metrics. Jack Welch, who was GE's CEO at the time, implemented a company-wide Six Sigma program (a quality improvement initiative) and established the 4Es: Energy, Energize, Edge, and Execution.

The company's financial turnaround was aided by the process-oriented, operation-focused, and cost-conscious organizational culture that emerged from this (Harvard Business Review, "GE'S Culture Challenge After Welch and Immelt").

According to what has been said thus far, it makes no sense to adhere to an organization's traditional culture and drag it along with its organizational past when it comes to culture. Organizations must quickly adapt their cultures if they hope to stay ahead of rivals in global marketplaces, given how quickly businesses are becoming global. Organizations must react swiftly to rival strategies, make quick judgments, and keep up with technical advancements in light of these developments. For instance, in flatter organizations (like Google), decision-making occurs more quickly than in hierarchical institutions and bureaucratic organisations (for example, State Bank?of India).

The following points might be used to summarize the necessity for cultural change:

Increasing the performance of businesses: Most of the time, when an organization experiences protracted periods of weak business performance, cultural reform becomes an urgent necessity (as was the case with GE before Jack Welch). Several studies have indicated that employee behavior has a significant influence on business performance in addition to external influences. For instance, when staff members are unable to accept responsibility for their job, it is difficult for an organization to resolve concerns with the quality of its products. Adopting a learning culture where every worker strives to raise the standard would be more beneficial in such circumstances.

Adapting to the external environment: A business's external environment can change due to a number of reasons, including changes in government regulations and technology adoption, technological advancements like e-retail, management changes within the company, and shifts in the economy. For instance, the State Bank of India (SBI) introduced revolutionary modifications to the way banking procedures were carried out, transactions were carried out, customer services were rendered, etc. when it was finding it difficult to compete with private banks. This was a significant cultural reorganization at SBI that was brought about by developments in the external environment, including the introduction of new technology and fierce rivalry in the banking industry.

Modification of Organizational Culture

Changing an organization's corporate culture is the most difficult undertaking since it involves altering widely held values and beliefs. A well-known expert in the topic of organization behavior, Edward Schien, claims that altering an organization's culture is comparable to teaching. Workers receive training on how to shift the organizational culture from its current state to its ideal state. The process of changing a culture is methodical and requires several steps.

The following is a discussion of the steps involved in cultural change:

1. Establishing a feeling of urgency Finding the need for cultural change within an organization is the first step towards implementing it. The organization must educate staff members on the need for change if it hopes to successfully execute the intended adjustments. This can be achieved by informing staff members about dysfunctional components that lower performance and productivity within the organization. For example, when Lou Gerstner joined IBM as CEO and Chairman in 1993, the company had lost market share as a result of the availability of numerous, less expensive PC clones. As a result, customers thought IBM's technology was out of date. Gerstner saw a chance in this circumstance and suggested cultural change in order to improve?performance and increase productivity.

2. Changing key participants, including leaders: A leader is essential to altering the culture of an organization. Changes at the highest levels of an organization initiate cultural transformation. This is due to the fact that lower levels are affected by the way leaders behave when it comes to cultural transformation. An organization may need to fire managers who obstruct change in order to execute changes swiftly and effectively. A manager may oppose for a variety of reasons, including inflexible ideas and views, self-interest, or job insecurity. As an example, consider Walt Disney. Robert Iger took over as CEO in place of Michael Eisner, and his first move was to outlaw the central planning section since it employed individuals close to Eisner. Disney's inventive culture was ensured by eliminating the planning unit, which posed a significant obstacle to creative ideas.

3. Establishing role models: A role model is a person who sets an example for others to follow by their actions, appearance, or achievements. To inspire those at lower levels of the organization, leaders must serve as role models during the cultural change process.

Using Disney CEO Robert Iger as an example, upon taking over, he made sure that there was a culture of innovation by going to game creators' summits and providing comments on the same. He served as an inspiration to everyone else during the idea generation process.

Conversely, improper actions from the top management will have a domino effect. For instance, in 2006, Hewlett Packard revealed a crisis involving multiple board members who were suspected of giving journalists access to private material. As a result, the company engaged a group of security specialists to identify the offenders. To look for connections with journalists, the investigative team examined their call logs. Following a thorough investigation, criminal and civil charges were brought against the chairman and the other four board members. The organization's culture suffered as a result of the senior management's immoral actions.

4. Employee training: Companies that support and train their staff members can effectively adopt cultural changes. Schein contends that cultural transformation is a process of education, as was previously mentioned. Workers must receive training on how to alter company culture. This may be achievable if managers effectively convey to staff the required standards and conduct. For instance, NASA changed its culture and became more cautious about safety when the space shuttle Columbia broke apart during re-entry in February 2003. Comprehensive safety and cognitive bias awareness training programs were used to implement the modifications.

5. Modifying the compensation structure: Ensuring that changes stick around requires periodically rewarding and elevating staff members who actively support the suggested cultural changes. Furthermore, an organization's effective reward and recognition programs mirror the cultural characteristics that are prevalent there. Because of this, an organization must exercise caution when designing its reward system because it occasionally backfires and may not be beneficial in enacting cultural change. Individual-based incentives, for example, can impede the growth of a cooperative and team-oriented culture.

6. Developing new symbols and narratives: If new customs, symbols, and narratives are created within an organization, cultural change can be successful. Consider the instance of Continental Airlines, which set fire to its 800-page company policy manual in the parking lot in front of every employee. The organization's primary motivation for taking this action was to reassure its staff that a new culture of empowerment would be implemented in place of the intricate and customary policies. The new organizational policy handbook was only eighty pages long, and word of this story spread among both prospective hires and current staff members. This made it possible for the organization to implement changes successfully. In addition, Continental Airlines worked to symbolize change by repainting its aircraft and updating its waiting spaces.

Features of Cultural Transformation

A few common cultural characteristics are linked to the process of cultural change, according to Peter and Waterman. It is well known that these qualities are masters of change. Here is a discussion of these qualities:

Clear-cut and effectively conveyed strategic vision: An organization's workforce has to understand the strategic objectives that need to be met. A company that is clear about its concept, purpose, and objective communicates effectively with its stakeholders, suppliers, consumers, and employees. A thorough grasp of the current business environment must serve as the foundation for the organization's goal. An organization can achieve and maintain a competitive advantage in the market with the help of a well-defined strategic vision.

Prominent participation from upper management: The upper management must be dedicated to the process of cultural transformation. An organization may make long-lasting improvements when managers and executives from every department actively participate in the process. The organization as a whole must feel the effects of the changes that are implemented from the top down.

People-based competitive advantage: In the current business climate, it is vitally important for organizations to maintain an advantage over their rivals. Competitors can readily adopt anything, including packaging and marketing and promotion strategies. As a result, businesses must develop a long-lasting competitive advantage. By seizing chances and anticipating dangers, a dynamic, empowered, informed, and engaged staff may help an organization achieve high levels of competitive performance.

Market orientation: By creating a customer-focused culture, an organization may meet the expectations of its customers. To put it another way, an organization's goal at all levels should be to enhance the total customer experience.

Consensus-driven management: In order to successfully execute cultural changes, an organization must support management techniques that are motivated by a common, shared understanding. It can be difficult to get to a shared understanding when those in positions of authority prefer to dictate than communicate.

Acknowledgment of social responsibility: By contributing resources and earning income from the purchase of the organization's goods, society plays a vital role in the expansion of an organization. Over time, a contented community can serve as the cornerstone of a prosperous business.

For instance, the Tata Group formally amended its Articles of Association in 1970 to include a clause requiring the company to show consideration for its workers, shareholders, the community, and society at large.

Numerous regulatory authorities monitor whether organizations are conducting their business in a way that satisfies societal demands. Therefore, it's critical that businesses have a culture that demonstrates their accountability to their clients, staff, the environment, and society at large. Among these duties are:

Delivering superior quality products.

Resolving complaints from clients.

Keeping and disclosing financial records in accordance with accounting standards.

Obeying the rules of the environment.

Carrying out tasks that don't bother the nearby populations.

COMMUNICATION'S IMPACT ON CULTURAL CHANGE

Implementing cultural change in an organization requires effective communication inside the organization. Employees of an organization would be encouraged to fit in with the company culture if there is open communication. In the end, this would result in an organization running smoothly and foster goodwill among those inside and outside the organization.

It should be highlighted, nevertheless, that communication is more than just an organization informing its workforce about change initiatives. Rather, communication is a two-way process that also include getting input on the material shared from the staff. Organizations can effectively communicate change initiatives to employees by following specific standards.

Following is a discussion of a few of these guidelines:

Tailoring the communication: Prior to making any changes public, an organization must comprehend its audience and the responses it anticipates. The audience's knowledge and proficiency should be taken into account while encoding the message.

Establishing the right tone: The message's substance and tone affect how it is interpreted. Inappropriate tone might make the recipient feel insulted. not just the words chosen by the tone, but also the body language, the media, and the content.

Receiving feedback: As was previously mentioned, communication is a two-way street. When there is a shift in culture, the sender needs to be conscious of the recipients' reactions. As a result, the sender needs to make sure the receiver has read, acknowledged, and comprehended the change initiatives that are suggested in the communication.

Choosing an appropriate communication channel: There are a number of different ways to communicate within an organization, including one-on-one meetings, Web chats, and email. The intended audience, the urgency of the message to be spread, etc., all influence the method choice. The appropriate communication channel should be chosen by the sender to ensure that information is delivered promptly.

PRESIDENTS' IMPORTANCE IN TRANSFORMING NATIONAL CULTURE

Individuals inside an organization shape its culture. Organizational culture is shaped by its common assumptions, values, and worldviews. Therefore, it's critical to comprehend how an organization's staff members react to and accept a shift in culture. It is the duty of leaders in any organization to share their thoughts on the transformation with staff members in order to support their ability to adjust to cultural changes. To persuade people to embrace cultural shifts, they must lead by example. A leader must be committed to change and have a clear vision. DeSimone, Warner, and Harris assert that cultural transformation entails a challenging process of substituting an established paradigm or style of thinking with an alternative that can only be accomplished through effective leadership.

Purposeful change of any kind is nearly hard to accomplish without leadership, according to Kotter and Heskett's numerous research. According to Schien, in order to start a cultural shift, leaders must build organizational and individual capacity, assess the internal and external environments, promote involvement, and keep open lines of communication inside their organizations.

The function of leaders in bringing about cultural change might be summed up as follows:

A leader must recognize when an organization must alter in order to adapt.

A leader's job is to communicate the organization's long-term vision to others in order to establish the appropriate culture.

It is the duty of a leader to recognize and remove obstacles to change.

A leader must encourage the process of cultural change not just with words but also with their deeds and conduct.

To keep staff members motivated, a leader should recognize and celebrate their small victories in transforming the culture.

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