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Topic 8: Shaping organisational culture Topic 8: Shaping organisational culture Learning outcomes The work that you do in this topic will help you to achieve the following learning outcomes in the subject: · critically analyse and evaluate a variety of management and organisational theories and practices in the context of the contemporary business environment. · reflect critically on management issues such as ethics, sustainability, innovation and entrepreneurship, and how they are shaping 21st century organisations. It's not the way we do things around here Did you know that excellence in strategy execution is at the top or very near the top of lists of challenges facing public and corporate sector executives? Does it surprise you that this is so? We begin a series of topics that have the unifying theme of strategy execution; in essence, what do we need to know and do to execute strategy well. We are immediately faced with the dilemma here that the interpretation of ‘well’ in this context may have different meanings for different stakeholders. This is one of the challenges that managers must grapple with from day one of strategy formulation. We will be looking at some of the major activities and roles that managers must perform, mostly with others, if they want to be effective in making strategy happen. Just a minute podcast Click on the podcast below for a quick overview of the topic. Strategy execution is a vital area of practice for any manager who wants to succeed, but it is not one that is handled well in management texts. Typically, execution is parcelled into specific compartments – structure, people, leadership, managing organisational change and so on. We will certainly look into these areas, however, what's needed is an integrated, practical look at just what it takes to execute strategy successfully. We will be looking at two things in this topic. 1. Why strategy execution unravels. 2. Organisational culture, with particular reference to shaping culture in VUCA world. 8.1 Why strategy execution unravels Before looking into the detail of strategy execution, it is helpful to ask this question: What do we know already about the blockages to good strategy execution? This will help us appreciate the importance of the upcoming topics and their sequencing. As a starting point, take a look at this video on strategy execution (5:33 minutes) and reflect on your reaction to it. Watch 'Executing your strategy' (Kanopy) | https://csu.kanopystreaming.com/playlist/594577 Learning activity 1 What is your reaction to the take on strategy execution in this video? What are the strengths and what limitations do you see? The two resources shared at the end of Topic 7 should have already heightened your attention and interest in strategy execution. (If you didn't read the articles shared in Topic 7, now is a good time to hit the back button.) The causes of weakness in strategy execution that are covered in the two readings are summarised as follows: 'Your strategy needs a strategy' (Reeves, Love & Tillmanns, 2012): · . poor adaptive capabilities to address unpredictable environments . cultural mismatches between traditional and dynamic environments . poor control systems, misdirected; . failure to recognise that units or functions may need to manage more than one strategic style at a time. 'Planned opportunism' (Govindaraja, 2016): · . siloed units, lacking cooperation and coordination, stifles emerging opportunities . metrics based on short-term financial performance . failure to distinguish what can and what can’t be controlled. Sull, Homkes and Sull from MIT Sloan School of Management, London Business School and Charles Thames Strategy Partners add some critical insights to our understanding of why execution may fail: Read Sull, D., Homkes, R., & Sull, C. (2015). Why strategy execution unravels— and what to do about it. Harvard Business Review, 93(3), 57-66. The authors have conducted extensive research involving nearly 8,000 managers in more than 250 companies to support their argument that there are several myths - widely held but wrong beliefs - about strategy execution. These myths are: · execution equals alignment: there are serious gaps in cross-functional trust and coordination · systems for managing horizontal performance commitments lack teeth · execution means sticking to the plan (hence, limiting agility and adaptiveness to emerging opportunities) · once-off approaches to allocating resources (rather than taking a more fluid approach) · poor communication of strategic objectives by leaders (communication is measured by inputs, not understanding) · performance cultures that focus on past performance and non-financial rewards (but delay or fail to act on non- or under-performance and don’t recognise factors like agility, teamwork and ambition) · strong top-down cultures that breed helplessness in the middle, because problems are typically ‘referred upstairs’. These pieces of evidence and comment on poor execution have guided us in choosing what to focus on in the topics remaining in this subject. Many of these points will be considered, in one form or another, in this subject and in others that you will study if you are taking a business degree. We begin with organisational culture. (Accessible version of elevator pitch in Word) 8.2 Organisational culture In this part of the topic, we still answer three questions: 1. What is culture? 2. What types of culture/s do most organisations have? 3. What can managers do to shape culture? What’s the culture like in your organisation or in that part of the organisation you work in? This is such an important question, because culture is a form of regulation of behaviour, which, in turn, shapes strategy and results. Furthermore, culture is itself constructed from deeply held values and assumptions regarding how we will treat each other, within our part of the organisation and in our relationships with external parties, such as suppliers, customers and government agencies. So, knowing what culture is, the different types of culture and how to shape culture is very important for managers today. Case of the week: Garvin, D., Natarajan, G. & Dowling, D. (2014). Can a strong culture be too strong?. Harvard Business Review, 92 (1/2), 113-117. 'Topic 8 Shaping organisational culture & Topic 10 Designing organisations' (YouTube) | https://youtu.be/TcrwII6gbTU This case takes you to two GREAT BIG challenges facing contemporary organisations: entrepreneurship and innovation. What management problems do you believe confront the protagonists at Parivar? At one level, the case centres on the choice between (so-called) love or money. How far should we go in creating a family-like culture? When does this kind of culture lose momentum? Is a warm, open, ‘love culture’ less important than money? There are several issues to consider in this case, and they all revolve around this management dilemma for the folk at Parivar, a Chennai-based IT services company. Culture is… As the reading below (Samson, Donnet & Daft, 2018) explains, culture is the set of key values, beliefs, understandings and norms shared by members of an organisation (or, part of an organisation). The latter, added qualification signals that there is rarely just one type of culture in an organisation – there are many, and these are shaped by context; for example, professional groups, geographical location, organisation structure, and market characteristics. The reality is that there are probably many cultures in a single organisation. So, we need to be careful not to generalise or stereotype culture. Perhaps Sam is doing this in the elevator pitch. Read Samson, D., Donnet, T. & Daft, R.L. (2018). The environment and corporate culture. In Management (6th Asia Pacific ed.). South Melbourne: Cengage. Read pages 88-133. Watch This video (16:14 minutes) gives a nice summary of the meaning of organisational culture. 'Introduction: the culture' (Kanopy) | https://csu.kanopystreaming.com/video/organisational-cultures-0 In the reading above (Samson, Donnet & Daft, 2018), the authors explain that culture doesn’t just happen overnight: it emerges over time – learned by members of an organisation as they cope with external and internal problems. It is also transferred – taught to new members as the correct way to perceive, think and feel. How? Culture can be apparent and learned via dress, language, other symbols, office layout, stories, slogans and ceremonies. Take note of the powerful role that values and beliefs play in shaping culture – they are invisible and deeply embedded; which is why cultural change is so difficult to do and can so easily be undermined by inconsistencies between what is said and what is done. If cultures are not value-neutral, it follows that they can also sometimes promote unhelpful values and behaviours. This example from Uber is thought-provoking. Read Craig, C. (2017). Uber ugliness unmasks silicon valley's bro culture. InfoWorld.Com. Retrieved from https://search-proquest-com.ezproxy.csu.edu.au/docview/1871789499?accountid=10344 Learning activity 2 Let’s make this a little more practical. One way to do this is to apply the definition of culture to your own experience, either in work organisations or in another organisational setting such as a community group. 1. Think of at least two examples that demonstrate one or more elements of the organisation's culture. Be as specific as you can. 2. To the best of your knowledge, how have these pieces of culture emerged, and how do they persist? 3. Then, reflect on whether these pieces of culture help or hinder the strategy or objectives and the performance of the organisation. This is important because we are interested in how culture impacts performance. In Samson, Donnet and Daft's reading you see the example of Zappos.com, an online retail store that sells a wide selection of shoes. Under the direction of founder Tony Hsieh, Zappos proclaims that its culture is one of the reasons it is so successful. You’ll see what this means in practice. Here’s a video (5.41 minutes) that brings the company’s culture to life. Watch 'Zappos Company Culture' (YouTube) | https://www.youtube.com/watch?v=WiIeImBFRK4 Learning activity 3 What is your opinion on the culture of this company and the claims made that this culture is key to its performance? Are there aspects of the culture of Zappos that you are excited about? Are there aspects you’re not so thrilled about? Would you like to work in a company that has this culture? Understanding culture in VUCA world: Types of culture Sometimes, people speak loosely about culture as if it were a homogenous thing. It isn’t. There are, in fact, several types of culture, and your organisation will have more than one of these. Why? Because, as Samson, Donnet and Daft explain in the following reading, culture is in part a function of the external environment of an organisation and, in turn, its strategy and goals. For example, if the external environment requires a high emphasis on innovation and customer service, the culture should support this. Read Samson, D., Donnet, T. & Daft, R.L. (2018). 3.4 Types of culture. In Management (6th Asia Pacific ed.). South Melbourne: Cengage. Read pages 125-128. We have seen earlier in this topic that culture is one of the key barriers