Transforming Business Culture Notes
Transforming Business Culture
Chapter Objectives
Describe the usefulness of comparing “official” organizational values to behavior patterns observed in the organization.
Identify the four mechanisms used by anthropologists to account for change.
Contrast Edgar Schein’s definition of culture with Ferraro and Briody’s: “everything that people have, think, and do as a member of their society.”
Discuss why anthropologists have focused on the four mechanisms by which change does occur and have been less interested in how cultural transformation should occur.
Definition of Cultural Transformation
The phrases "organizational culture change" and "cultural transformation" are associated with a variety of cultural contexts, including innovation, sustainability, leadership, health care, employee performance, pedagogy, tourism, employee engagement, lean production, and religious practices. Anthropologist Alexander Ervin (2015) examines socio-cultural theories of change and gauges their usefulness in explaining global processes such as development, communication, social movements, and innovation.
Cultural transformation is synonymous with organizational culture change and is defined as: “A process of cultural change that produces a cohesive pattern of change in an organizational culture” (Briody et al. 2010: 8).
Companies struggle with the process of change as well as the outcomes of the change process. Some changes occur unexpectedly, while others are forecast but not seen as priorities. Still others are high on a company’s radar but the strategies put in place are not sufficiently effective. Thus, sometimes change is planned and sometimes it is not planned. The focus is primarily on planned change, though cultural responses are enough of a wild card that what is planned often appears as unplanned.
Example: Downsizing without Restructuring
A large consultancy firm advised one hospital to “cut heads” and it did, by 350 employees. The administration was able to control costs, but that decision led to unintended consequences in the hospital’s medical practices. Employees perceived the cuts as random rather than based on performance, their morale was low, their workload had risen, and they were afraid of losing their jobs. Patients were subject to longer wait times and were at an increased risk of lower-quality service.
Change Unfolding
Organizations are a powerful force in the economy, contributing to the development, production, and sale of products and services, employee livelihoods and lifestyles, and community outreach and improvement. They are linked together in a supply chain with the hope of appealing to customers or clients. When innovations occur or issues emerge with the product or service, or with the work practices, processes, and/or relationships associated with them, a part or all of the supply chain can be affected.
Spotlight those breakthroughs
Major Metropolitan Credit Union (MMCU) was a 100,000-member, non-profit financial institution with over 300 employees located in the western U.S. MMCU was coming off one of its most successful financial years (2019) when the pandemic struck, resulting in an 80 percent drop in branch business, a skyrocketing rate of missed auto and mortgage loans, and an explosion of mortgage refinancing requests.
MMCU’s leadership ordered all non-branch staff to work remotely in mid-March 2020 which required the installation of desktop computers at home along with VPN access. It quickly became obvious that digital transformation would become part of MMCU’s future.
Mario Moussa and Matthew J. Hill were asked to consult on COVID-19’s impact on MMCU and make suggestions for adjusting to its “new normal.” They began by conducting 20 interviews with branch and department managers about the performance barriers they faced (e.g., technology limitations, longer processing times, member complaints) and innovative breakthroughs they identified (e.g., productivity gains, new remote processes, enhanced recruiting).
The pair facilitated Zoom workshops to discuss the results with mid-level and senior managers. An internal team of “culture journalists” documented challenges and solutions in everyday work practices through their photography and comments, using photovoice research. Next, focus group participants weighed in on the photovoice evidence, validating and developing the themes further. Moussa and Hill captured “strategic themes” on electronic posterboards in MMCU functional areas such as credit card services, risk management, and retail banking. Then they convened a virtual town hall. Key breakthroughs were highlighted and disseminated, raising their level of visibility and employee engagement. This kind of participatory research resonated with employees and leadership. Four pilot projects on digital transformation occurred in 2021 (Hill and Moussa 2022). Digital technologies were applied to solve troublesome operational issues (e.g., virtual collaboration, member service-request system, member education on digital products). The pilots subsequently laid the groundwork for a visioning process. The shared digital vision united the organization around the “what and why” of where MMCU was headed and “how” the firm planned to achieve it.
Developing and Implementing a Plan for Change
Organizational leaders craft plans to disseminate innovations or address issues. The planning process can vary from simple to challenging. Technical, legal, and marketing complexity, appropriate involvement of knowledgeable and influential individuals, ability to meet product, service, and organizational goals, and degree of acceptance by stakeholders are among the elements that might derail the “best-laid plans.”
Example: Hospital Downsizing
The cuts had been planned, and apparently tracked, since employees continued to be laid off. Yet, no centralized plan for workplace restructuring was implemented in any of the hospital medical practices. Such restructuring in the form of process improvements, training or retraining of personnel, role overlap during busy times (e.g., medical assistant helps scheduler), or employee strategy sessions to gather input and mitigate concerns would have come with a price tag that the hospital was unable (or unwilling) to pay. Any of these possibilities might have helped mitigate the downsizing’s effects on employees. Patient satisfaction had plummeted, not to mention the impact of stress on patients’ overall health.
Plans often are incomplete, leaving implementation unspecified and under-resourced. Announcing a new approach does not mean that it magically and harmoniously blends with the current organizational culture. It is precisely at this intersection of new and old where beliefs, values, expectations, and assumptions emerge in full force, with cultural reactions ranging from enthusiastic support to widespread rejection.
Data Gathering
It is essential to know something about the culture before proposing any set of recommendations or interventions. Without that specific local knowledge, it would be a bit like working in the dark. The change management agent, like a consulting business anthropologist, typically has experience with cultural transformation projects. However, any pre-existing process, approach, or methodology would need to be adapted to the specific circumstances and culture of the organization in question.
There are many ways to gain insight into an organizational culture. For starters, one could search websites and collect publicly available information. If acting in a consulting capacity, it might be possible to negotiate a set of data collection methods that could shed light on the past, the current state, and potential future state. Keep in mind that organizations are continually in the process of change and that the change agent would be coming into the organization at a particular point in the organization’s history.
Example: Data Collection Methods
Documentary Data: Collected from the medical group’s website, paying special attention to the organization’s “About Us” page that listed the cultural values.
Surveys and Focus Groups: Conducted with medical practice employees sequentially, with the four focus groups building on the 84 surveys that were collected. Survey questions focused on roles in the medical practices, assessment of those roles, and perceptions of the culture while the focus groups explored the current and ideal views of employee work. Themes and patterns from the two methods were compared for commonality and variation.
Comparing the Plan with the Stated Cultural Ideals
By focusing on the intersection where new meets old, it is possible to gain a foothold in constructing a knowledge base of the medical group’s organizational culture. It also puts us in a position to learn how members of the culture interpret the downsizing.
Cultural Ideals of the Medical Group
Patients are depicted as the center or focal point of care delivery. The “extraordinary team” sets a high bar in what it sought for its patients (“wellness”) and how it would serve them (with “compassion,” “integrity,” and a “team spirit”). The importance of team relationships and relationships with patients is evident in the combination of values chosen. The team also strives to be capable and innovative, with a desire to excel in all facets of its work.
Analyzing the Reactions to Change
The organization’s cultural ideals provide a point of departure for understanding organizational culture change. They offer a thumbnail sketch of the cultural expectations for employee behavior and ground us in what is valued and desired. It is especially informative to compare the cultural ideals with a culture’s current state following a significant event or crisis.
When stakeholders perceive an organizational change negatively, conflict typically arises over what happened, how it happened, and why it happened. Initially, that tension may appear to be layered over the current culture. Eventually, the new way seeps into the organizational culture to some degree. However, it also has the potential to bring employees together and encourage long-term adaptation to the change.
Main Results of the Downsizing
Employee Effectiveness Compromised: Employee effectiveness was compromised due to increased workload. The new “reality” had sunk in leaving employees discontent, uneasy, fearful, and overwhelmed. It was an especially critical issue for the clinical side because the downsizing affected patient care.
Dissatisfaction with Management: Employees expressed dissatisfaction with hospital management’s unwillingness to listen and respond to their concerns. They appeared largely powerless in a hierarchically structured organization where business rules often seemed inconsistent with caring for patients. Moreover, “management” was perceived as neither valuing nor recognizing employees for their contributions, regardless of their role, and was viewed as having little understanding of their work situation.
Unanticipated Decision: The decision to downsize was unanticipated and viewed as “top down.” There was no evidence of managerial communication about the pending organizational changes prior to the downsizing; employees reported learning about it in the newspaper. Under such circumstances, trust and teamwork with the hospital administration were severely harmed.
Strife along Job Function Lines: Strife also occurred along job function lines within the individual medical practices. Physicians valued their status and autonomy in attending to patients. They often quarreled with office managers over expectations, responsibilities, and organizational “rules.” For some practices, the status hierarchy became more rigid, and the postdownsizing organizational culture fell short of the collaborative team ideal.
Moving Forward
There is an eagerness to find solutions for implementing new initiatives, alternative approaches, and innovative ideas successfully. Insiders may be looking for enhancements to their brand, a permanent fix for a broken process, or improvements in fractured workplace relationships. It is not uncommon for insiders to bring in “fresh eyes” to help understand the current culture and collaborate on how things might be different. Consultants, for example, may be looking for ways to apply their skills, test their ideas, expand their client base, or simply earn a living.
Critical Attributes of Planned Cultural Transformation
The planned cultural transformation process typically exhibits three important attributes:
Core Idea: A central idea underscores the rationale for the suggested change and is used to bolster support for it. That idea may be explicit or implicit.
Concept of Culture: Schein’s definition of culture entails a “pattern of shared basic assumptions learned by a group as it solved [sic] its problems of external adaptation and internal integration” (2010: 18). He views culture as “an abstraction” (2010: 7). the anthropological definition is broader and more comprehensive: culture is “everything that people have, think, and do as members of their society."
Time-Based Process: A prescribed, evolving structure for achieving a particular goal: a time-based process. A series of steps or stages represents a sequenced approach and order to cultural transformation.
Business Approach to Change
Business researchers have developed process models to assist corporate leaders with both necessary and desired organizational change. They typically identify a key theme that acts as the glue in connecting the various steps in the change process together. Their work consists primarily of case studies and surveys from which they generate recommendations.
Core Theme
Models of organizational change generally reflect a core theme or centralizing concept. Generally, core themes represent areas of potential weakness for organizations. Still, the themes are depicted not so much as challenges, but as cautionary signs requiring extra care and effort.
Concept of Change
Core to the business approach to organizational change is the concept of change. But as we describe below, there is no uniformity in how the term change is used:
In the singular vs. as a sequence of plans, actions, or events.
Situated in the individual vs. reflecting a group, or even a corporate phenomenon.
The purview of leadership vs. the responsibility of the entire organization.
Moreover, the varied interpretations of change are sometimes, but not always, explicitly related to culture.
Culture Understood
Business writers understand culture as separate and distinct from other organizational elements (e.g., strategy, process). Culture is treated as a variable, that is, something that can be altered or varied. It is possible to control, measure, and manipulate culture, just as leadership, strategy, or quality can be controlled, measured, or manipulated. Moreover, the culture concept is understood as something that the organization has (consistent with this idea of culture as a variable), rather than is or may become.
Three-Stage Process Models
Three distinct steps or stages characterize most of these process models of change:
The ways of the past are identified as inconsistent with the present or future.
A transition period during which a new vision and plan are created.
The plan is implemented and institutionalized.
Lewin’s model was based on experimental work demonstrating the power of group decisions over individual decisions. He argued that motivation to change was linked, in part, to the individual’s “commitment to a group” (1947a: 38).
Multi-Stage Process Models
Significantly more detail on the steps or stages in planned organizational change is offered in the multi-stage process models. Embedded in some of these models are versions of the three stages described above.
Kotter identified eight steps or stages in successful organizational change that is led by leadership. Steps 1–4 help to “defrost a hardened status quo,” while steps 5–7 present the new approach, and the last step “grounds the changes in the corporate culture and helps make them stick” (1996: 22).
Cameron and Quinn created a nine-step process for helping managers develop and implement organizational change.
Burke developed a four-phase model:
Pre-launch stage: emphasized establishing the need for change and a vision.
Launch: stressed communication and addressing resistance.
Post-launch: highlighted consistency and perseverance.
Sustaining the change: the unanticipated consequences and contingency plans, and “launching yet again new initiatives” (2014: 327).
Summary - Business Approach
Thematically notable: The change process is infused with a key theme or concept to orient and guide action.
Stage-based: A series of steps or phases represent a framework to describe and explain the change process.
Individually or group-focused: The goal is to develop and implement the change by altering individual attitudes and behavior.
Reflective of vulnerabilities: Each phase targets a set of change-related activities, often in anticipation of organizational shortcomings and missteps.
Practically oriented: The change process offers guidance at numerous points along the way.
Leadership-centric: Leaders (both formal and informal) design, package, communicate, and direct the change process.
Anthropological Approach to Change
Anthropologists point out that change results from four distinct mechanisms: invention, culture loss, diffusion, and acculturation (Barnett 1953; Steward 1972; Barrett 1991).
Invention: The process of creating something new. It refers to the creation or discovery of a new process, item, or method.
Cultural Loss: Culture changes through cultural loss, a process in which cultural elements disappear. Spoken languages are one obvious example.
Diffusion: Refers to the dissemination or borrowing of a practice, product, or process more widely.
Acculturation: A particular type of diffusion involving repeated and sustained contact between at least two groups. Significant cultural changes result in one or both groups over a relatively short time.
John Berry developed an acculturation model consisting of three distinct phases of interaction:
Contact is initiated.
Conflict follows.
Some form of adaptation is “inevitable” (1980: 11).
Similarities to an Anthropological Approach
Some studies have adopted several key components of an anthropological approach. These studies pay much more than lip service to the concept of culture, typologies, and methods used by anthropologists.
Implementing change through C.O.R.E.
Relations Research engages in a participatory approach to implementation using its C.O.R.E. (Center of Relational Excellence) approach. Adapted from Kotter’s (1996) “Guiding Coalition” concept, C.O.R.E consists of a small group of 8–12 internal volunteers representing diverse roles, functions, areas of expertise, and demographics; the client CEO is one of the volunteers. C.O.R.E. meets once or twice monthly, with each member taking on tasks in-between the team meetings. C.O.R.E. works together to address key issues which emerged from the cultural analysis.
Crises often force change: a manufacturing case study
Ian Mitroff (2001: xii), states, “crises do not happen merely because a single part of a complex system fails. Rather, they occur because a significant amount of the overall system fails.”
In 2009, the U.S., Canadian, and Ontario Provincial governments came to GM’s rescue. Together they spent over 60 billion to help the corporation, albeit with a stern warning to “fix the culture”—a culture perceived to be dysfunctional, slow to change, and arrogant.
Briody and her colleagues Bob Trotter and Tracy Meerwarth believed they understood the process of cultural change that was going to be necessary to reshape GM and U.S. manufacturing culture. Their work on the Ideal Plant Culture Project had been ongoing since 2002
Process and problem solving as core ideas
The team of six researchers worked closely with both management and union throughout the project. The team observed them at work, listened to their ideas, explained what the analysis showed, and gathered additional insights during validation sessions with them. The project combined stories from the plant floor, observations, interviews, and historical and cultural analysis to illustrate how manufacturing culture had evolved and how it needed to change.
The researchers used two primary domains to help illustrate and explain the overall process of planned cultural transformation:
Cultural adaptiveness occurs when a company “gets it,” that is, understands that it must adapt its worldview to address new issues in the external environment (2010: 9).
Cultural responsiveness refers to the ability of an organization to maintain an appropriate pace, response, and targeting of transformation in relation to that external environment.
Seven Cultural Obstacles
Learning a new culture
Ethnocentrism
Cross-cultural conflict
Resistance to change
Cultural dilemmas
Cultural contradictions
Cultural drift
Incorporated in the composite were enablers or positive processes that could promote or sustain planned cultural transformation. Examples of enablers from this manufacturing culture included putting oneself in someone else’s shoes by understanding and appreciating that set of feelings or experiences and accelerating problem solving and innovation based on learning from past experiences.
Summary - Anthropological Approach
The anthropological approach to planned organizational culture change displays three patterns that are consistent with the business approach. They include:
Thematically notable: The change process is infused with a key theme or concept to orient and guide action.
Stage-based: A series of steps or phases represent a framework to describe and explain the change process.
Practically oriented: The change process offers guidance at numerous points along the way.
However, other patterns distinguish the anthropological from the business approach.
Organization-focused: The ideal cultural model depicts distinct areas of workplace attention: work environment, workforce, relationships, and work practices; it is likely that these focal areas, and perhaps others, would have relevance in other organizational settings.
Weighted toward implementation: “Heavy lifting” is required during the implementation phase as change is introduced; problem solving occurs as enablers are triggered to deal with various obstacles to implementation.
Change-engaged: Transformation is successful when there is a role for all in moving the changes forward to achieve the organization’s goals.
Applying the Planned Cultural Transformation Process to Health Care
It would be instructive to apply the planned cultural transformation process outside of manufacturing. Let’s compare the six-step process that Briody and her colleagues developed in automotive manufacturing with what unfolded in the medical group project. This type of assessment has the potential to identify consistencies, reveal weaknesses, and validate the general usefulness of the process.
We uncovered some useful insights in comparing the process designed for manufacturing culture to the medical group culture:
We found that the six individual steps were reasonably robust and connected well with one another since they were internally consistent.
We learned that the steps could be applied to two different activities: gathering and analyzing data, as well as implementing a specific cultural transformation.
We found that gathering and analyzing data on cultural obstacles and enablers should be separated from implementation
It is insufficient to expose the cultural obstacles during implementation. The obstacles also must be addressed effectively so that the change process can continue.
We concluded that some of the steps should be iterative.
Conclusion
Organizations face the prospect of cultural transformation at many points in their history, given that they are dynamic, continually evolving entities. Typically, change is complex and difficult. The business approach to change has focused on ways to effect organizational change. The anthropological approach to change takes a different tact in exploring change processes.