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Culture, Management Style Culture, Management Style

and Aspects of and Aspects of ImplementationImplementation

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Style, Culture and StructureStyle, Culture and Structure

The Style and Culture of a firm is The Style and Culture of a firm is intrinsically linked to its structural form.intrinsically linked to its structural form.

Consider the nature of Organizational Structure

» Reward System» Communication System» Information System» Control System

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Planning System Control System

Organisational Structure

Information System Communication System

4 Elements of Organisational Structure

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Structure, Style and CultureStructure, Style and Culture

Look at page 2 in the handout Look at page 2 in the handout - we can see - we can see how the sub-functions of structure can vary how the sub-functions of structure can vary with ‘generic’ organizational form :with ‘generic’ organizational form :– Functional OrganizationFunctional Organization

– Multidivisional OrganizationMultidivisional Organization

– Conglomerate OrganizationConglomerate Organization

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Schein’s Definition of CultureSchein’s Definition of Culture

Organizational culture is a complex set of basic underlying assumptions and deeply held beliefs shared by all members of the group, that operates at a pre-conscious level and drives their behaviour in important ways.

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Levels of Organizational CultureLevels of Organizational Culture

Schein’s Three Levels of Organizational Schein’s Three Levels of Organizational Culture:Culture:

Level 1 Level 1 - Culture as Artifacts- Culture as Artifacts Level 2 Level 2 - Culture as Espoused Values- Culture as Espoused Values Level 3 Level 3 - Culture as Ethos - Culture as Ethos

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Levels of Organizational CultureLevels of Organizational Culture

Level 1 - Culture is manifested in the form of Culture is manifested in the form of behavioural regularities in the artefacts and behavioural regularities in the artefacts and creations. These are often easily observed, but can creations. These are often easily observed, but can be indecipherable. Examples:be indecipherable. Examples:

– TechnologyTechnology

– ArtArt

– Language & SpeechLanguage & Speech

– Rituals, Social Forms, Overt Behaviour etcRituals, Social Forms, Overt Behaviour etc

– Status and StratificationStatus and Stratification

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Levels of Organizational CultureLevels of Organizational Culture

Level 2 - Level 2 - Expression of culture in the form of Expression of culture in the form of espoused values: what ‘ought’ to be. What we espoused values: what ‘ought’ to be. What we believe to be important. Core values. Examples:believe to be important. Core values. Examples:

Expression of corporate philosophiesExpression of corporate philosophies– Norms of behaviour in working groupsNorms of behaviour in working groups

– Slogans used by companies Slogans used by companies

– Rules of getting alongRules of getting along

– Custom and practiceCustom and practice

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Levels of Organizational CultureLevels of Organizational Culture

Level 3 - Level 3 - Cultural ethos - taken for granted Cultural ethos - taken for granted behaviours often invisible. Examples:behaviours often invisible. Examples:– The distinguishing character, sentiment, moral The distinguishing character, sentiment, moral

or guiding beliefs of a person, group or or guiding beliefs of a person, group or institution.institution.

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Cultural AssumptionsCultural Assumptions

The organization's relationship to its The organization's relationship to its environmentenvironment

The nature of realityThe nature of reality What it means to be a human beingWhat it means to be a human being The nature of workThe nature of work The nature of human relationshipsThe nature of human relationships

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Can we relate these together ?Can we relate these together ?

PurposePurpose

Strategy ValuesStrategy Values

Standards & BehaviourStandards & Behaviour

Ashridge Diamond

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Handy’s Cultural TypologyHandy’s Cultural Typology

Handy using the work by Harrison Handy using the work by Harrison developed a cultural typology to help us developed a cultural typology to help us label cultural forms in organizations:label cultural forms in organizations:

Power CulturePower Culture Task CultureTask Culture Role CultureRole Culture Person CulturePerson Culture

Lets look at each in turn

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Power CulturePower Culture

EntrepreneurialEntrepreneurial Control through key individualsControl through key individuals Little bureaucracyLittle bureaucracy Able to move and react quicklyAble to move and react quickly

The Web

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Task CultureTask Culture

Job or project orientatedJob or project orientated Match people with tasksMatch people with tasks Get the job done mentalityGet the job done mentality Individuals exercise control over their jobsIndividuals exercise control over their jobs Judgment/reward by resultsJudgment/reward by results Adaptable cultureAdaptable culture

The Network

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Role CultureRole Culture

Based on procedures and pre-defined rolesBased on procedures and pre-defined roles Stereotype bureaucracyStereotype bureaucracy Slow to react and changeSlow to react and change Operates in stable environmentsOperates in stable environments

The Greek Temple

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Person CulturePerson Culture

The individual as the centre pointThe individual as the centre point The individual is responsible and trustedThe individual is responsible and trusted The functions of the firm support the The functions of the firm support the

individual.individual. Typically found in professional organizations.Typically found in professional organizations.

Atomized or Clustered

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Johnson’s ‘Cultural Web’Johnson’s ‘Cultural Web’

An alternative way of looking at culture in An alternative way of looking at culture in an organisation. A useful model to use an organisation. A useful model to use

when relating culture to changewhen relating culture to change

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SYMBOLS

STORIES

RITUALS &ROUTINES

POWERSTRUCTURE

ORGANISATIONAL STRUCTURECONTROL

SYSTEM

THEPARADIGM

THE CULTURE WEB - G.JONHSON

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The Two Realities - EverydayThe Two Realities - Everyday

SYMBOLS

STORIES

RITUALS &ROUTINES

EVERYDAYREALITY

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The Two Realities - Top ExecutiveThe Two Realities - Top Executive

POWERSTRUCTURE

ORGANISATIONSTRUCTURE

CONTROLSYSTEM

TOP EXECUTIVEREALITY

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The Two Realities CombinedThe Two Realities Combined

SYMBOLS

STORIES

RITUALS &ROUTINES

POWERSTRUCTURE

ORGANISATIONSTRUCTURE

CONTROLSYSTEM

EVERYDAYREALITY

TOP EXECUTIVEREALITY

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Cultural Web and ChangeCultural Web and Change

Johnson argues that in organisations two realities co-exist Everyday Reality - manifested by

» Symbols

» Stories

» Rituals and Routines

Top Executive Reality - manifested by» Power Structure

» Organisational Structure

» Control System

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Issues of Management StyleIssues of Management Style

The Work of Goold The Work of Goold and Campbelland Campbell

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Goold & Campbell Style TypesGoold & Campbell Style Types

Goold & Campbell managerial style types Goold & Campbell managerial style types emerged from their research into emerged from their research into management in British companies.management in British companies.

Strategic Planning StyleStrategic Planning Style Strategic Control StyleStrategic Control Style Financial Control Style Financial Control Style

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Strategic Planning StyleStrategic Planning Style

Characterized by strong central Characterized by strong central management involvement in business level management involvement in business level strategystrategy

Extensive planning review processesExtensive planning review processes High co-ordination across SBUsHigh co-ordination across SBUs A co-operative processA co-operative process Flexibility in planningFlexibility in planning

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Strategic Control StyleStrategic Control Style

Active involvement in SBU level planningActive involvement in SBU level planning Flexibility in allowing SBUs to devise their Flexibility in allowing SBUs to devise their

own strategyown strategy The role of the centre is to appraise SBU The role of the centre is to appraise SBU

plans concerning internal logic etcplans concerning internal logic etc Tight control of resultsTight control of results

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Financial Control StyleFinancial Control Style

Low level of influence of planning but very Low level of influence of planning but very tight financial controls from the centretight financial controls from the centre

Short-term demanding profit targetsShort-term demanding profit targets Control by budgetsControl by budgets High degree of central control over SBUsHigh degree of central control over SBUs

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Influences on strategic management Style

Nature of the Business

Resources in the Organization

- Shape of the portfolio - Senior management skills

- Size and payback of investments - CEO personality

- Stability of the competitive - Financial condition environment

Strategic Management Style

- Strategic planning- Strategic Control- Financial Control

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Influences on Strategic StyleInfluences on Strategic Style

External Influences:External Influences:

– Degree of linkage between the business unit Degree of linkage between the business unit and other SBUs in the portfolioand other SBUs in the portfolio

– The size and nature of the payback of major The size and nature of the payback of major investmentsinvestments

– The nature of the competitive environment The nature of the competitive environment facing the SBU or the firm.facing the SBU or the firm.

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Influences on Strategic StyleInfluences on Strategic Style

Internal FactorsInternal Factors

– The personality of the chief executiveThe personality of the chief executive

– Senior management skillSenior management skill

– The financial condition of the organization as a The financial condition of the organization as a whole.whole.

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Management StylesManagement Styles

Goold & Campbell’s style types are seen Goold & Campbell’s style types are seen

as different ways in which to as different ways in which to divide divide responsibility responsibility between corporate HQ and the between corporate HQ and the individual business units or SBUs in a individual business units or SBUs in a diversified company. It is a balance diversified company. It is a balance between:between:

Planning InfluencePlanning Influence Control InfluenceControl Influence

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Influences on Style TypesInfluences on Style Types

Planning Influence: Planning Influence: The extent to which the The extent to which the centre influences individual SBU strategycentre influences individual SBU strategy

Control Influence: Control Influence: The way in which the The way in which the firm expresses the type of budgetary control firm expresses the type of budgetary control imposed by central managers to the SBUs imposed by central managers to the SBUs against results achieved.against results achieved.

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Control Influence

Pla

nnin

g In

fluen

ce

Flexible Tight Strategic Tight Financial

High

Low

Strategic Planning

HoldingCompany

StrategicControl

FinancialControl

Strategic Management Styles(Goold & Campbell (1987)

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Long-term Strategic

Centrally led strategy

Co-ordination &Co-operation

Full analysis anddiscussion

Flexible strategies

Short-term financial

Locally created strategy

Autonomy &accountability

Entrepreneurialquick decisions

Tight controls

Strategic Strategic FinancialPlanning Control Control(SP) (SC) (FC)

SP SC FC

SP SC FC

SP SC FC

SP SC FC

SP SC FC

The selection of a particular style involves important choices

Goold & Campbell (1987)

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KhandawallaKhandawalla

Khandawalla looks at management style in a Khandawalla looks at management style in a contingent way: Style is contingent upon:contingent way: Style is contingent upon:

Nature of Risk takingNature of Risk taking Level of Technocracy in the firmLevel of Technocracy in the firm Degree of flexibility in structureDegree of flexibility in structure Degree of participationDegree of participation Level of coercion Level of coercion

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KhandawallaKhandawalla

In addition to style being contingent internal In addition to style being contingent internal organizational factors, Khandawalla also places organizational factors, Khandawalla also places an external dimension into the equation:an external dimension into the equation:

Degree of turbulenceDegree of turbulence Degree of hostilityDegree of hostility Nature of the marketsNature of the markets Degree of restrictiveness / regulationDegree of restrictiveness / regulation Nature of technology intensityNature of technology intensity

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Different Companies Different StylesDifferent Companies Different Styles

Companies have not converged on any one Companies have not converged on any one style for the obvious reason that different style for the obvious reason that different managerial philosophies exist on:managerial philosophies exist on:

How to motivate a management teamHow to motivate a management team How to succeed competitivelyHow to succeed competitively

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General ConclusionsGeneral Conclusions

The way we manage and the process of The way we manage and the process of management has a dramatic effect on outcomes management has a dramatic effect on outcomes and that there is and that there is no one right styleno one right style

Different styles flow from different Different styles flow from different assumptions as to how the centre should assumptions as to how the centre should manage the SBUsmanage the SBUs

Each style and management philosophy has its Each style and management philosophy has its own method of creating successown method of creating success

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Culture and ChangeCulture and Change Change in companies almost Change in companies almost

always leads to a cultural shift.always leads to a cultural shift. Culture has a change dimension.Culture has a change dimension. Culture and Change are related to Culture and Change are related to

Strategy Implementation.Strategy Implementation.

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Force Field AnalysisForce Field Analysis

Driving Forces Restraining Forces

CompanyStrategy

�Internationalisation�Demographic�Competitive �Technology�Market Changes�Customer Behaviour�Regulatory�etc..

•People•Culture•Structure•Systems•Comfort Zones•Unceratinity•Risk Tolerance•Organisational Factors•etc..

Successful implementation of strategy seen as a balancing of these two opposing forces

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Barriers to ChangeBarriers to Change

Communications

Role of UnionsEmployee Relations

Lack of QualityManagement Information

Barriers to Change

Track Record Culture and Attitudesof Change of Existing Line Managers

Low Level of New IT Skills

Sheer Size of the Company

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Components of Organisational ChangeComponents of Organisational Change

Creating a newshared mindset

Building competenciesand capabilities

Changing corporateculture

Collectively leads toimproved business performance

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The Change ProcessThe Change Process

Trigger Arguments for Action for ChangeEvents Change Change Outcomes

Internal and Evidence is gathered Planning process Intended andexternal pressures challenging the new goals, and unintended for change dominant culture structures, people changes in

symbols, etc. routines, morale dominant logic and culture

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Change process seen visuallyChange process seen visually

Freeze Un-freeze

Re-freeze Change

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We are all looking for that complex formula that spells success

Finally