The Hindu Business Line : Change and culture

It is a fairly well-established now that an organisation's culture is neither built nor changed rapidly. Indeed it is fashionable to call some aspects of a company's working style as `the way' of the organisation — as in `The Toyota Way' which over time becomes so sacrosanct that it is impossible for any one person to seriously think of suggesting breaking away from its essentials. Some even use biological terms such as `unquestioning acceptance of customer feedback and prompt service is part of our DNA'. This gives culture an immutability and permanence. Yet even places such as General Motors and IBM do change over time, typically in response to getting into a crisis. Such change is always painful, involving a change of guard at the top and most often a redefinition of priorities, market segments, divesting some businesses, and getting rid of people — under various names and guises. A change in direction, strategy and usually structure (towards a leaner, more aggressive organisation) follow one another, although it is important not to make the mistake of thinking that restructuring itself is a major source of change.

Restructuring or re-organisation is the most often adopted, visible element of organisational change especially in response to a takeover, merger or change in leadership. Yet it is also known to produce disappointing results, in many cases. Wholesale changes to reporting relationships, responsibilities, roles and even re-location are seldom popular and slow to take hold. For this reason they are usually met with a sort of resigned acceptance or tacit cynicism. "Ah well, this is another of our CEO's latest fads, based on his recently found enthusiasm for a consultant or theory" is the unspoken response of much of the organisation, which has wearied of changes.

A useful framework for understanding cultures in an organisation is to think of culture as a web of interconnected variables — which links the people, the objectives, the strategy, systems and structure along with the style of management and communication, to one another.

Each one is obviously influenced by the others to some extent, as will be evident in the example given here. Take the case of an equipment supplier, a dependent business which survives by supplying nearly all its output directly to another business. It is known as a captive supplier with certain peculiar characteristics. Compared to marketing organisations such as those in mass consumer products, the emphasis on marketing and brands is usually much less. Such organisations are dominated by the concern for delivering what the single customer (or indeed a few major ones) want.

On the one hand being an exclusive supplier of an important component to the customer, typically a full system builder or the original equipment manufacturer, might give one a feeling of security. Yet, the same mutual dependence is also a source of vulnerability. The organisation is therefore torn between being a subordinate and an independent business in its own right.

Nonetheless the most successful management style under these conditions is a directive if not autocratic. A few people at the top or a major department call all the shots and everyone listens to them because their skills hold the keys to the prosperity of the business. The style is centralised and so the structure is flat with the least possible number of layers between the CEO and the person at the front end of manufacturing or design. A centralised organisation works best under these conditions; there is no point in trying to develop too much of independence among the employees. It is all too easy to take dogmatic positions in this but one can see that culture is thus a `contingent variable' which has no unique existence. For the same reason trying to change a culture to a more popular one that is the flavour of the era is unwise. It has to fit in with the job to be done and little else.

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