Is Orgnaisational Culture An Important Factor For Organisational Change?

For the last few decades, the construct of organisational culture has caused much debate from both practitioners and academics. However the general consensus is that organisational culture can be defined as the values, including attitudes and beliefs. Artefacts, including tangible material elements of the culture, such as logos or mission statements and finally assumptions referring to invisible core elements, which may include the shared collective vision within the organisation (Schein, 1985.)

The way in which culture is projected onto employees can be through subtle pressures from management to act in a certain way. For example if an organisations culture values participative decision-making or strong customer orientation etc. then employees are likely to adopt or at least externally display these values through their behaviours that reflect these values (Furnham, 1999.)

However, if an organisation has particularly dominant and strong values then it seems plausible to suggest that in the event of change culture, may influence how effective the outcome is likely to be. Especially as authors have suggested that to make change effective one also needs cultural change (Morgan, 1986) and further that any significant planned change must refer to the organisational culture if the full benefits of the change are to occur (Smith, 1998).

Therefore due to statements such as these it seems beneficial to further assess the relevant literature to establish the relevance of organisation culture in influencing the outcome of change. Theoretical literature will first be discussed, including what type of culture the organisation can be said to have, followed by an examination of empirical and applied evidence.

According to Handy (1985), culture can be categorised into one of four types, however, these four types focus on both culture and the structure of the organisation. The 1st type is role cultures that are considered typical of bureaucratic organisations, being hierarchical in nature. Values within such a culture would probably include strict rules and clearly defined roles and thus expectations of employees are made very clear. In relation to change, such organisations are likely to be able to successfully make small changes, but radical changes would probably not be coped with, especially as such an organisation values order and predictability.

The 2nd type is power cultures that have often developed around one core authoritative individual. Thus the organisations culture is likely to value control and obedience.

Such an organisation is therefore likely to effectively handle change if the employees share the same vision as the core individual and especially if the organisation is small, as control can be maintained by the authoritative figure. However, if the organisation grows, it is less likely that control can be maintained and with more individuals it is less likely that all will value changes especially as they may feel they have little discretion over it.

The 3rd type is task cultures that are often characterised by valuing flexibility and adaptability, further valuing team and individual achievements. Although such a culture may seem the most obvious type to readily accept and successfully incorporate change, this may not always be the case. Especially when considering the issue mentioned earlier, that this type of culture is more than likely to have a number of subcultures within the organisation as it heavily values team work.

The 4th and final type is person cultures, valuing interpersonal relationships and autonomy, thus individual discretion is highly valued within the organisation. However, change at the organisational level maybe effected as a result of such a culture, as individuals are encouraged to be independently creative forcing change on them may not be readily accepted.

Two themes seem apparent from the above typologies of culture, the first point appears to be that values are an extremely important factor within culture, and as values are considered to directly effect individuals behaviour at work (Meglino et al, 1989) any change that does occur should address this issue as culture is not easily modified. Specifically, as noted by King & Anderson (1995) trying to manage culture can be dangerous, as embedded in culture is employees' personnel experiences and a history that cannot be diminished as a result of changing, for example, logos and mission statements. The second theme appears to be that it is not simply culture that can influence change, but rather it is very dependent on the type of culture as well as the type of change that an organisation plans. Thus its seems evident that any organisational change must carefully be considered in terms of the both the type of culture and the type of change that is most likely to be effective.

According to Laurent (1983) one of the clearest ways to examine the relevance of culture in relation to its influence to change is through examining mergers, specifically when two or more cultures also have to merge. Weber (1996) has demonstrated with empirical evidence exactly why this is so, it is stated that the primary reason for M&As are to increase competitive advantage. However, many have not lived up to these expectations, with failure rates being in the 50-60% range. Weber's (1996) study used a sample of merging banks and found a strong effect of cultural differences that was believed to be attributed to two factors. First in such a service organisation, which is often a highly uncertain and uncontrollable, culture acts as a potent control device. Secondly, the effect of cultural differences may have been a result of loss of autonomy of many of the managers that caused conflict as the cultures clashed and managers felt that they were questioned and had to answer why they completed tasks etc. in a particular way that was not in the preferred technique of the other organisation. From the results it is clear that cultural differences can have destructive effects on the effectiveness of the change process.

Other changes that have been implemented include the recent increase in Quality Circles that emphasise greater employee involvement and a reduction in managerial control. However several authors have found that these changes lead to resistance and failure as a result of cultural clashes, where the assumptions and values of Quality Circles clash with those of management (Russell & Dave, 1989; Redman et al, 1995).

A further factor that suggests that organisational change can be influenced by the organisational culture is evident from the fact that many organisations have companies throughout the world. Thus take for example an American Investment Bank that an acquaintance of mine worked for in the City, originally