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%ase Analysis O& Organi'ational %ulture Misconceptions - Rick Delbridge he concept of organizational culture is one of the most commonly used and yet poorly understood in the business world. Unfortunately, it has become such a catch-all term that the expression `culture' now means everything and nothing. hile reflecting upon an organization's culture, it is important to be clear as to exactly what is being discussed. !ince the initial popularization of the concept by management gurus such as "eters and aterman and #eal and $ennedy, organization theorists have given a greater subtlety, rigor and sophistication to our understanding of the %ey aspects of culture. !tudents reflecting upon the &" case will find it helpful to be precise in how they use certain terms and ideas within their overall conception of the company's culture. 'n this regard, it is useful to draw on !chein's wor% in differentiating the levels at which culture may be considered.
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!chein ()*+,- distinguishes three levels of culture. artefacts, values and basic assumptions. /rtefacts are the physical manifestations of an organization's culturethe visible level of its social and physical environment. This includes both the written and spo%en language used in the organization and the overt behavior of its members. The second level refers to individual's values and beliefs and refers to the ways that these inform employees' perceptions and actions. 0ore fundamentally, but unobserved, at the deepest level are the basic underlying assumptions that guide behavior. These are the unconsciously held, learned responses of individuals that are ta%en for granted. These are the essence of what `culture really is.' 't is instructive to consider exactly what aspects (or levels- of &"'s culture 1iorina has been engaged in changing or at least influencing. 'n comparing and contrasting the `&" ay' with the `1iorina ay,' students should reflect upon !chein's levels and distinguish between organizational rules, systems and structures and the deep-seated personal beliefs and values of individuals. There are important ethical 2uestions over whether corporate control should be attempted through the manipulation of employees' values. 1urthermore, organization theorists have increasingly coalesced around the view that organizational culture is largely `unmanageable' or at least that culture lies beyond the 3control3 of managers. This is because any organization is li%ely to have members with very different views of what the %ey characteristics of the culture are. 1urther, research suggests that organizations are often home to a variety of `sub-cultures.' !ome scholars tal% of the 3socially constructed3 nature of culture. That is, the meanings understood by individual members are formed through social interactions that give commonly accepted definitions. These understandings are `created' and will shift and change depending upon the organizational context, individuals involved and the nature of their interactions. 1or these reasons, and in challenging the unitarist assumptions of management consultants who assume that organizational culture is necessarily unifying,

scholars such as 4inda !mircich ()*+5- have argued that it is more appropriate to consider organizations as cultures rather than to treat culture as an organizational variable. 'n other words, the organization is a culture (or cultures- rather than has a culture. This underscores the limitations of management's opportunity in regard to constructing or changing an organization's cultural characteristics. To conclude that culture is unmanageable is not to negate the opportunity for managers to exert influence. 'ndeed, the importance of `leadership' is another aspect of organizational culture that analysts agree is important. &owever, the recognition of the socially and collectively constructed nature of employees' cultural understandings emphasizes the importance of symbols such as stories, rituals and physical manifestations of organizational values. / leading organizational theorist 6areth 0organ ()**7- has argued that managers can exercise significant impact, `0anagers can influence the evolution of culture by being aware of the symbolic conse2uences of their actions and by attempting to foster desired values.' 8f course, 1iorina has a ma9or problem in see%ing to promote change because &" has such a well-established set of myths and stories that support and reinforce the &" ay. /ny manager see%ing such influence must be aware of the context and history of the organization. This is clearly indicated in the case study when the son of one of the founders argues that 1iorina's changes are contrary to the &" ay. 0ore generally, students must reflect upon the contested nature of organization. /s an outsider brought in to &", 1iorina would have faced significant challenges. !he would have had to become familiar very 2uic%ly with the organization and its internal politics. &er appointment is li%ely to have been contentious within the senior management levels of &". 't cannot be denied that there could be some in the company who wish that she would fail. #etailed ethnographic studies of attempts to manage culture change have shown the complexity of the problem. atson's (:;;)- case study demonstrated how a `discourse' of culture change, personal and employee development came up against alternative discourses that reflected established corporate interests in cost measurement and tight management control. This is the obverse in some ways of the situation at &", but note that atson reports how the `progressive' ideas around change and development became destabilized when the expectations they created were undermined by corporate policies leading to redundancies. 1inally, there is the 2uestion of the relationship between culture and organizational performance. The nature of causality of these relationships is difficult to determine but conventional wisdom suggests that superior performance may accrue when an organization's structure, strategy and culture are a good fit and complement each other. This was regarded as a %ey strength of the &" ay. / %ey doubt surrounding the changes made by 1iorina is the extent to which they challenge the core values of &"'s own employees. 1or example, what are the li%ely implications of increasing 9ob insecurity within an organization that relies upon employees' discretionary effort and willingness to collaborate and share %nowledge< =an organizations see%ing innovativeness and populated by highly trained professionals move toward greater corporate control and more instrumentally oriented management systems< (e&erences 1. Morgan G (1997), 'mages of organization (2nd edition), London: Sage. 2. Schein E (1985), 8rganizational culture and leadership. / dynamic view, San Francisco: osse!"#oss. $. S%ircich L (198$), =oncepts of culture and organizational analysis,

&d%inistrati'e Science (uarter)!, 28: $$9"$58. *. +atson , (2--1), 'n search of management. =ulture, chaos and control in managerial wor%, (2nd edition), .ar)o/: 0rentice".a)). ,he author is 0ro1essor at 2ardi11 #usiness Schoo), 2ardi11 3ni'ersit! and Fe))o/, &d'anced 4nstitute 1or Manage%ent 5esearch, 3nited 6ingdo%. > The '=1/' University "ress . /ll ?ights ?eserved. %ase Analysis )al*ing the +%ulture ,ightrope' - Ranjan Varghese he &" case exemplifies companies that conform, by and large, to general patterns of organizational life cycle, revealed in the wor% of many research scholars. 8f these, 4arry 6riener's wor% is the most remar%able one. hile analyzing the case, we will examine the following factors, though not necessarily in the same order.
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'mpact of &"'s culture on organizational performance. =ulture's dominance over structure in managing &". The life cycle stages of &". =hange in organizational strategy and its impact on culture. 4eadership change in &" and its conse2uences.

The creativity and dynamism of two zealous entrepreneurs gave birth to an organization that grew to serve customers worldwide through mobilizing over ),@;,;;; employees. &", under the leadership of 4ewis "latt, successfully passed through critical stages of growth during which issues of control, autonomy and leadership are acid tests for all organizations. The employees internalized doctrines about the company's values as depicted in the charter of corporate ob9ectives drafted and institutionalized by the founders. The culture influenced the employees so much that they were willing to suffer pay cuts and other monetary disadvantages. Thus, the culture enabled organizational ob9ectives assume priority over individual goals and aspirations when need arose. &"'s culture has been characterized by an implicit message of lifetime employment, team orientation, open door policy and encouraging innovation. 0ost importantly, it is about sharing the benefits of profit and growth with organizational members and all other necessary conditions for producing happy and zealous employees. The rich fruit of this culture is evident from the fact that &" could achieve revenue and earnings growth steadily for many decades. The company's business domain being information technology ('T-, its production processes are essentially %nowledge driven. The renewing of minds by the concerned employees is an integral input for creating %nowledge, and &"'s culture was a fertile ground for facilitating the same. Culture and performance: The strong culture of an organization is a driving force for heightened employee performance. 8n the other hand, a strong structure may place people in a narrow functional mindset. =ulture empowers people but structure might disarm them of necessary will and determination to thin% and act out of the box. This behavioral mode is critically important for a %nowledge driven organization li%e &". &owever, the top management was afraid whether the team

orientation at &" had slipped into a mere consensus based mode of behavior. Fiorina's radical measures: The 2uestion now is whether the painful separation of large number of employees at &" was inevitable or not. The first casualty of most strategic shifts as witnessed in the recent past at many organizations, are the employees. The leadership change in &" had deep ramifications on its culture and performance. =arly 1iorina too% bold decisions to shed the excess fat in the form of human resources. This strategic decision is not uncommon in organizations that function in an uncertain external business environment. !uch decisions can also stem from internal uncertainties due to human obsolescence. 0ammoth organizations li%e &" may reach a stage wherein older employees become psychologically worn out and unfit to s%illfully manage growth while dealing with external uncertainties. 'n &", where lifetime employment was assured, employees with lot of seniority might have accounted for a significant percentage of the wor%force. This would have consisted of a cross-section of people from lower level %nowledge wor%ers to higher-level managers. 't is evident from the case that the team-orientated decision and wor% process in &" had melted down to a mere consensus based approach. Therefore, sha%ing up the human resources was thought to be necessary to achieve employee diligence and sharpening of minds to tac%le new challenges and opportunities. -&&ectiveness o& Fiorina's strategy 8ne is tempted to thin% that 1iorina was influenced by bounded rationality. #ecisions driven by bounded rationality tend to neglect the complete and accurate picture of reality. The decline in &"'s growth was primarily due to the global slowdown in the 'T sector. The reactive strategy focusing on the wor%force that was adopted by 1iorina might have definitely sha%en the organizational members from sleep. &owever, other options could also have been considered. /n example that can be cited here is that of =oca-=ola. This company has always been embroiled in a battle with "epsi for mar%etshare and growth. This battle was powered by a narrowly driven strategy without considering choices other than competing with "epsi on the mar%eting turf. / former =A8 of =oca-=ola understood the underlying wea%ness in this strategy. &e realized that the top management was influenced by bounded rationality in resorting to this stereotyped strategy. &owever, the outcome was not at all positive to drive the company towards growth. &e then insisted that his subordinates visualize a strategy to increase cola consumption in the U! consumers. The decision to install vending machines on a wider scale was the result of such a powered thin%ing. This course of action paid great dividends and gave brea%through results to =oca-=ola. he trap of success: / common reason for organizational failure is `falling into the trap of success.' 4iving on past glory ma%es companies complacent and shortsighted, blind them to external changes. This may persuade people to standardize the output process around success formulas. The outcome may be insensitivity to gradual change. / management scholar has drawn an analogy of such a situation to a frog living in cold water initially. But when the temperature started rising gradually, it could alert itself to escape so as not to perish. 'f this adaptability is lost, organizations will become anxiety driven and devoid of initiative. Future .nitiatives to /elp /0 turnaroun1 1iorina must act prudently so as not to undermine the benefits of &"'s strong culture. !he must consider other options to stay ahead instead of merely steering around success formulas such as shedding the wor%force. The action to stir up the salespeople by lin%ing their pay to targets is well thought out. &owever, different incentives must be thought of for those who innovate at the wor%place as well. / proper succession planning process must be put in place to groom dynamic people from within to steer the company in hard times. 'n conclusion, 1iorina must lin% the strategy with the culture instead of wea%ening

it. 8ne must always bear in mind that it is easy to demolish but difficult to build. ,he author is &ssociate 0ro1essor " Mar7eting 5esearch 8 .5 at Schoo) o1 2o%%unications and Manage%ent Studies (S2MS), 2ochin. > The '=1/' University "ress . /ll ?ights ?eserved. %ase Analysis .s that all there is to it2 - Ren! "
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he &" case clearly describes the problems that a company and its leadership face when trying to brea% up an existingoften long-lastingcorporate culture and replacing it by a new one. The challenges generally associated with cultural changes are enormous and even if they are overcome, do not guarantee a better than before performance. 'n the case of =arly 1iorina, the opposite seems to be the result. the company does significantly less well than before, thus fuelling the belief of people resistant to change that any intervention by the top management in the very roots of the company (and thus in its psychological genes-, is useless and even counterproductive. =ompanies can only be successful when building further on the existing culture, by building further on the people in such a manner that theyand only theybelieve to be in their own interest and subse2uently in that of the companies' they wor% for. Ces, you canfor example as% people to hand in part of their salary but, you cannot then fire them without eyebrows being raised. 8ne can install a more `tight ship' style of leadership, but cannot ignore the existing ways of wor%ing of people at &" by simply imposing your will. 'mposing your will on people in today's companies as =A8, and thus on an existing culture, is even harder than it used to be ); years ago. Dowadays, people have come to realize that the average lifespan of the leadership of a company has shrun% tremendously. 8nce appointed, a =A8 only lasts a couple of years and the chances of him or her being replaced forcefully when even the slightest shortcoming in performance is detected, has gone up manifold. 3 e will sit this one out3 is not an uncommon phrase in many companies today. 's =arly 1iorina therefore wrong in her approach< ' would not immediately say so. But her approach hardly has to do with cultural change. &er style of leadership is one not too different from the ones being adopted by most company executives following the `free for all' growth years of the late )**;s, i.e., of the boom economy generally described as the `new economy' andEor the economy of unparalleled opportunities. 4eadership is now all about the power to enforce focus and better performance, to exercise control, to ma%e people do what they need to do. 't is no longer about support and guidance, about talent and development, or about long-term results. 't is `now' that counts, tomorrow may never come. ?icardo !emler with his open and supportive !emco management stylesimilar to the old &"has given way to 6ermany's top woman =A8Fudith 0aierwho indeed runs a tight ship. you come on time, you go on time, you ta%e orders and obey, you perform or else. 's it a coincidence that what used to be called `macho management' is currently being adopted by some of the highest level female executives< 's it a coincidence that it is not 9ust them, but their people who want clarity and decisiveness, rather then being confronted with the overalland always changingcomplexity of business performance and of being consulted for solutions< 8r is this new style of leadership directly related to the personal ris%s that many executives increasingly have to face< =an you blame them for ta%ing control, when their heads are on the

bloc%< Donetheless, will it lead to better company performance< /t least &" is not a showcase for the positive. &owever, the true, almost fundamental, problem underlying the issue of culture and leadership is that of the increasing inhumanity of companies towards their employees, no matter how highly educated and trained they may be. /nd of the danger of the very same people whom companies call their human `resources' turning against their companies, not 9ust through stri%es but also with a view on overthrowing its leadership. !trange as it may seem, in one of my forthcoming boo%s, ) written together with Fonathan Allis, we point out that the current corporate trend to not only `standardize, mechanize, procedurize and control' production processes, but to do the same with their (client- service development and delivery processes (which in many companies are %nown as `office 9obs'-, drives out the freedom of people to thin%, act and coordinate according to how they see fit. 'n all probability, people will not accept the new reality and support a culture change in organizations. There is a danger that employees will have to deal with increased anxiety and underperformance. =ould &" under the leadership of =arly 1iorina suffer from the early stages of corporate inhumanity< Allis, Fonathan G Tissen, ?enH, 9,he 4nhu%an ,ouch,: !criptum "ublishers, The Detherlands (will appear first in &olland, early :;;@-.
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,he author is 0ro1essor o1 #usiness Manage%ent, at ;!enrode 3ni'ersit!, ,he ;ether)ands. > The '=1/' University "ress . /ll ?ights ?eserved.