week 6 due Monday morning pst

My attached references must be used and cited correctly.

Kindly note that I will not accept grammatical mistakes or poor content writing

Instructions: 6 Page APA Post Graduate (Masters Level) essay (6 pages not including title or reference pages). Assignment instructions and required resources and materials attached.
Number of Pages: 6 Pages

Deadline: 2 days
Academic Level: Post-graduate

Paper Format: APA

Instructions

In 2005, Sprint and Nextel joined forces in the form of a corporate merger at a cost of $35 billion in cash and stock. At the time, the merger made the company the third largest US cellular carrier. Sprint CEO Gary Forsee was appointed CEO of the combined company, while Nextel CEO Timothy Donahue was the chairman. It was expected that customers would benefit with expanded network capabilities and product offerings. The new entity would benefit from operational cost savings and technological advances. Although the merger appeared to be a good deal, the two entities’ organizational cultures were not thoroughly vetted. Organizational culture is one of the reasons the SprintNextel merger came to an end in 2013 with the shutting down of Nextel.

For this assignment, assess the impact of culture with the merger between Sprint and Nextel. Your evaluation should include an analysis of how the cultures of Sprint and Nextel differ. Provide your recommendations on what organizational leaders could’ve done to create a unified strong culture for the organization.

Support your paper with a minimum of four (4) scholarly resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.

Length: 6 full pages, not including title and reference pages

Your synthesis should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.

Required Supporting Articles and Scholarly Sources are attached on Zip Folder

What Is Company Culture, and How Do You Change It? –

https://www.forbes.com/sites/williamcraig/2014/10/24/what-is-company-culture-and-how-do-you-change-it/#24e275d4b308

Week 6 Assignment Resources/A storys impact on organizational-culture change

A story’s impact on
organizational-culture change

Elizabeth Briody
Cultural Keys LLC, Troy, Michigan, USA

Tracy Meerwarth Pester
Consolidated Bearing Company, New Vernon, New Jersey, USA, and

Robert Trotter
Northern Arizona University, Flagstaff, Arizona, USA

Abstract

Purpose – The purpose of the paper is to explain the successful implementation of organizational
applications, and ensuing organizational change, based on a story from a GM manufacturing plant.

Design/methodology/approach – The approach involved collecting and analyzing the Hoist Story
as part of a multi-year ethnographic research project designed to identify the key attributes in an ideal
plant culture. Through a cooperative process of co-production, the authors worked in tandem with
organizational members on issues related to organizational-culture change.

Findings – The findings emphasize both the Hoist Story’s process impact and outcome impact. The
Hoist Story was a catalyst for the change process, resulting in a high level of buy-in across the
organization; as such it contrasts with much of the management literature on “planned change.” It also led
to the development of several “packaged products” (e.g. a story script, video, collaboration tools) which
propelled GM manufacturing culture closer to its ideal – a culture of collaboration. Using employee
storiesas a means tounderstand anddriveculture change isa largelyunderdeveloped areaofscholarship.

Originality/value – This paper provides value by bridging the gap between theory and praxis. It
includes the documentation and cultural analysis of the story, but illustrates how the story evolved
into specific organizational-culture-change applications. This “soup-to-nuts” approach can serve as a
model for organizational researchers and change agents interested in spearheading or supporting
organizational-culture change.

Keywords Organizational culture, Organizational-culture change, Cultural applications, Collaboration,
Organizational stories, Ethnography, Manufacturing industries

Paper type Research paper

Introduction
Organizations are continually in the process of change, with the hopes of becoming
more productive, efficient, and effective in their mission. At General Motors (GM), the

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0953-4814.htm

The authors appreciate the willingness of so many GM employees to speak with them about their
views of the ideal plant culture. Their statements, examples, and stories, along with their
enthusiasm and spirit of cooperation helped the authors to frame the key cultural issues and work
towards the creation of tools for organizational-culture change. The authors thank the plant
engineer for sharing the Hoist Story with them. They thank the members of the training staff for
their interest in working with them to create the various applications for organizational-culture
change. Several plant managers, members of GM’s Manufacturing Managers Council, senior GM
leadership, GM-UAW Quality Network leadership, and the leaders of some UAW locals have been
very supportive of this work. The authors thank Perry Kuey who designed Figures 1 and 3. They
also appreciate the helpful comments offered by the journal reviewers.

A story’s impact
on change

Journal of Organizational Change
Management

Vol. 25 No. 1, 2012
pp. 67-87

q Emerald Group Publishing Limited
0953-4814

DOI 10.1108/09534811211199600

Ideal Plant Culture Project was initiated to gather employee and managerial input on
organizational-culture change within GM’s manufacturing function. As applied
researchers, we were asked to gather data from several existing US manufacturing
plants on desired improvements in the culture of those plants. The anticipated outcome
was a set of best practices and applications that GM plants could use as they sought to
improve their overall effectiveness.

Over a period of several years, we conducted anthropological fieldwork in a variety
of manufacturing environments. We discovered a strong desire among all
organizational members to move away from an “old way” viewed as directive and
authoritative, to a more collaborative approach to production work characterized by
team-based cooperative activities, individually-suggested improvements on work
practices and processes, and plant-wide problem solving. Perceptions in the form of
statements and stories, along with the behaviors we observed in manufacturing
environments, helped us to construct a model of this collaborative “ideal.” In this paper,
we focus on one particular story – the Hoist Story – as a window onto the evolution of
plant culture. Because this story presented the contrasting case of the “old way” and
the “ideal,” and because it became a catalyst for future changes within the plant, it
reinforces the notion that stories have the potential to create and sustain
organizational-culture change.

Literature review
There is general consensus among organizational scholars that stories represent an
“exchange between two or more persons during which a past or anticipated experience
[is] referenced, recounted, interpreted or challenged” (Boje, 1991a, p. 8). The
organizational literature surrounding stories and narratives is wide ranging – with
diverse areas of focus: understanding and sharing story content (Mitchell, 2005),
examining organizational roles (Chreim, 2007), exploring the organizational context in
which the story is embedded (Hansen, 2006; Bryant and Cox, 2004; O’Connor, 2000),
identifying the ways in which the story is interpreted (Fronda and Moriceau, 2008),
examining organizational practices in cross-cultural settings (Soin and Scheytt, 2006),
and using stories to “make sense” of organizational changes (Chreim, 2007; Reissner,
2005; Brown and Humphreys, 2003; Gabriel, 2000; Boyce, 1995). Much of this literatures
specifies how stories and narratives are “socially constructed” as people interact (Stacey,
2001; Boje, 1991a). Indeed, much of the research on storytelling (Adorisio, 2008; Mitchell,
2005) and “storyselling” (Lapp and Carr, 2008) emphasizes the motivations of those
conveying the story (Steuer and Wood, 2008) as well as the collective interactions
between the teller/seller and the organizational audience (Boyce, 1995).

Stories represent one mechanism through which organizational culture and
organizational-culture change can be described and explained. Stories can be used to
promote a particular point of view – sometimes referred to as a “hegemonic” narrative
(Vickers, 2008). Such stories tend to exhibit a singular, uni-dimensional orientation
toward the issue at hand (e.g. a management perspective concerning a set of
organizational changes, Steuer and Wood, 2008). Stories can be used to reinforce core
cultural ideals much like the reinforcement produced by urban myths for adults and
fairy tales for children. The stories represent attempts to plan for and control the
ensuing organizational changes, though some have called into question managerial
abilities to direct such change (Beech, 2000). An alternate view is that all organizational

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members, including management, have their own explanations for the emerging
changes (Brown and Humphreys, 2003). These explanations often appear in the form of
stories and offer listeners new ideas and strategies for coping with the uncertainties
(Czarniawska, 1997; Orr, 1996; Orr, 1986).

Some differences in the literature emerge when we compare the work of
organizational researchers with the practitioner community. Researchers are more
likely to be involved in diagnosing areas undergoing change (Boje, 1991a) and
explaining the persuasive value of storytelling to foster change (Suchman, 2003). By
contrast, practitioners are more likely to be proscriptive – pitching change through
“coaching advice” using “steps” “keys” and “training” related to story use (Silverman,
2006; Armstrong, 2002; Denning, 2001). Some have even aggregated compilations of
diverse of stories that can be drawn upon by organizational leaders to push for change
(Parkin, 2004). Gaps between scholarship and practice have been identified by Boje
(2006, p. 223) who argues that they are “holding back the development of story praxis”
as a mechanism for organizational-cultural change. Boje, as well as our research team,
recognize the importance of capturing the perspectives of those individuals linked with
the change process. Storytelling allows the transmission of those experiences,
thoughts, and values “in their own words.”

Our paper is an attempt to fill in some of these gaps in story praxis by examining
both the process impact and the outcome impact of stories on organizational-culture
change. Of particular interest to us are the ways in which stories become part of the
cultural fabric of the organization, and how they help to “provide a framework for the
future” ( Jordan, 1996, p. 28). Our approach includes, but moves beyond, the story or
narrative and its interpretations, to organizational action. Connell et al. (2003, p. 159)
suggest that “stories become knowledge-flow facilitation devices.” Such imagery was
useful to us as we conceptualized the path one story took as a major
organizational-culture change was underway. Our ability to capture a diachronic
view of the organizational-culture-change process led to the implementation of a series
of independently-developed “packaged products” that symbolized and reinforced the
ongoing organizational-culture change.

In addition, we were interested in the broader cultural context in which the story
evolved. Our approach, like that of many other researchers (Adorisio, 2008; Hansen,
2006; Jordan, 1996; Boyce, 1995), links the ethnographic field data surrounding the
story, with the narrative content of the story. However, since ours was a “real-time”
rather than retrospective study, we found that the researchers were fully immersed in
the story-production and application-development processes, akin or community
action research (see Wallace, 2005; Van Willigen et al., 1989; Chambers, 1985). Indeed,
the roles of study participants and researchers were intertwined over a period of
several years and involved repeated and direct interventions in plant culture. We
describe this involvement as “co-production” in which study participants and
anthropologists build on each other’s knowledge and skills to create and put into
practice specific applications that fostered organizational-culture change.

Background
We began the research portion of the project by conducting ethnographic research in
four GM manufacturing plants in the US. Our guiding ethnographic question was
intended to elicit views of an “ideal” plant culture. We phrased it in various ways:

A story’s impact
on change

. What would make your plant the best possible place in which to work?

. Describe what you consider to be the ideal plant culture.

. What characteristics make up an ideal plant culture?

. How do we reach the ideal? What are the barriers?

. What could be done to make this plant the best place to work in GM?

We gathered the perspectives of a cross-section of organizational members (i.e. over
400 hourly, salary, and executive employees during the field period and validation
phases of the project) in various settings including along the assembly or subassembly
lines, in skilled-trades areas, in break rooms, in offices, and in the cafeteria.

Study participants typically responded by relaying examples or telling stories of
their experiences at work – both positive and negative. These stories described or
clarified a current or past situation and were typically followed by an evaluation of that
situation. This pattern of response was our first indication that organizational
members drew distinctions between what they considered the “old way” of thinking,
behaving, and interacting, and a potential new or ideal way. From these findings, we
created and subsequently validated (e.g. in conversations, during formal presentations
to plant leaders) the Bridge Model of Cultural Transformation (see Figure 1). It
illustrates a composite conceptualization of the organizational-culture-change process,
a process that is situated within a broader cultural environment. Cultural problem
solving occurs as employees recognize the necessity of change (cultural adaptiveness)
and then respond appropriately (cultural responsiveness)[1]. Organizational members
encounter obstacles (e.g. resistance to change, cultural contradictions) as they attempt
to change their culture. They may apply enablers (e.g. cultural processes that support
the direction and pace of cultural transformation such as empowering employees,
taking time for relationship building, and providing appropriate and sufficient
training) to mitigate the obstacles and provide some direction in moving away from the
old way towards the ideal.

We then turned our attention on the particular statements, examples, and stories,
finding that the field data was directly linked to the cultural theme of collaboration.
Organizational members were able to articulate a strong desire for a more unified,
cooperative, and harmonious work culture than what they were currently experiencing

Figure 1.
Bridge Model of Cultural
Transformation

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or had experienced at some point in the past. Indeed, the overwhelming preference was
for a congenial set of co-workers and supervisors who would work together to achieve
plant goals – problem solving along the way. Thus, a culture of collaboration
represented their ideal. Indeed, study participants’ world view could be summed up in
a simple message – “It’s all about relationships,” a statement conveying the
importance of building and maintaining relationships as a prerequisite to overall plant
effectiveness. Collaboration, cooperation, and unity cannot be achieved unless strong,
healthy relationships are in place among organizational members. A more detailed
content analysis (Bernard, 2000; Bernard, 1998; Schensul et al., 1999; Trotter and
Schensul, 1998) revealed that the comments, examples, and stories we collected could
be grouped into four topical categories:

(1) plant environment;

(2) work force;

(3) work practices; and

(4) relationships[2].

From this categorization we created the Ideal Cultural Model (shown at the far right of
Figure 1). We illustrate the model with four equal parts to highlight the importance of
balance among the four elements even though the Relationships portion of the Ideal
Cultural Model contained more comments and stories than the other three quadrants.

Documenting the Hoist Story
The stories we documented varied in content, character development, complexity of
cultural themes, and length. We learned about the Hoist Story in an interview with one
of the plant engineers. During the interview, the engineer used the original blueprints
to explain some of the difficulties encountered by operators when they tried to use a
hoist – an apparatus used for raising something into position. About two weeks later,
we conducted a follow-up interview with the same engineer to clarify and refine the
accuracy of our notes and gather additional detail. The engineer took us out on the
plant floor to show us the hoist and introduce us to the operators.

The text below represents a composite of the two interviews – the only narrative
data we were able to collect because the plant was in the process of ceasing operations.
Text concluding with the number 1 represents the first interview while the text
concluding with the number 2 represents the follow-up discussion.

I have to come in this weekend. There was a problem out on the floor of people lifting the
hoods by hand. They weren’t using the hoist (no. 1).

There was a medical concern. We got a recordable (incident which requires an investigation
per US Occupational Safety and Health Administration regulations) (no. 2).

I asked them (the operators) to explain why they weren’t using the hoist. They said, “It’s
cumbersome, it’s not fast enough, and it adds 16 steps to the job.” I said that I would try to
work with them to help figure out a solution. I came up with something and I said, “These are
my ideas.” [At this point the engineer pulled out a blueprint to show how the original rail
supporting the hoist was configured and how the new rail could be configured.] Then I came
up with a fix and went out and talked with the guys again. I asked, “Do you think it will
work?” (no. 1).

A story’s impact
on change

I . . . got their input. As a group we came up with the most. . .cost effective issue to solve the
throughput issue and then the ergonomic issue goes away. The next step was redoing the
plan and getting management to buy in. After getting management buy in, we placed the
order (no. 2).

The cost was about $5,000 (no. 1).

The normal process (from my experience in other GM locations) is to have the operator,
Maintenance, Ergonomics, and Safety buy in prior to shipping from the supplier to our
facility. That is called a buy off. That was something the (plant) management saw as
unnecessary . . . We were not allowed to go down there (to the supplier’s location even though
it was close by) . . . They (the supplier) shipped it (the ridge rail) in and we had eight trades
people from two shifts and two operators to install it. After installing it, we found out by
measuring the (physical) forces (needed when using the hoist) that there was a problem with
(both) the design and the build (of the new ridge rail). They (the forces) were just within our
ergonomic limits but not acceptable because we felt as a team they should be a great deal
better. The forces were 22 to 24 pounds of force (no. 2).

We needed to get a new one (ridge rail). The (senior) manager told me that he was dissatisfied
with what I had done. He said, “You told me that this tool would satisfy their (the operators’)
problem but it hasn’t.” I replied, “But you wouldn’t let me go down to do my buy off” (no. 1).

We got the supplier . . . (to come to the plant. Their design engineer) came in with an
attitude that “We’ve built 100 of these (ridge rails) and there has never been a problem.”
After the team convinced the design engineer to use it (the hoist) for himself, after loading
three hoods he said, “This is too hard.” For me, . . . I gained credibility with the team since I
didn’t leave it (the ridge rail issue) alone. Then the supplier agreed that there was a problem
and that they would work with our design suggestions. They had some major design flaws
. . . The supplier said they would build us a new one (ridge rail). Actually they said they
would build some new components. I told them I wanted a whole new one. They needed the
whole unit back so they could analyze what they did wrong . . . After going through the
whole build process I asked the management staff, “Do we go into an official buy off this
time?” The comment was, “Why wouldn’t it be right this time?” The team responded, “The
first one (ridge rail) wasn’t right so do we want to take a chance, or do we want to do
business the way we should and do a formal buy off? If there are any issues or concerns,
they’ll be taken care of before it is shipped” (no. 2).

The manager said, “Go and do the buy off.” So I finally got permission to go . . . I took nine
people with me, both day and night shift, salaried and hourly. I took people who do
measurements etc. and we did go through the buy off. Each person signed off. This kind of
thing will save money in the long run. It’s them (the team who worked on solving the
ridge-rail problem) that are pulling the culture along. It turned out that there were still four
items which were a problem (on the supplier’s second ridge rail). I got them (the supplier) to
write down in writing that they would correct each of these problems (no. 1).

After we got the new one (ridge rail), the force varied from four to seven pounds and only
momentarily it jumps to seven pounds due to our design suggestions. This helped them (the
supplier) improve their overall design . . . During installation we had the actual Maintenance
and Production involved on the weekend. From what we learned in the supplier’s facility, it
took half the time to remove and install it than the first one, and with half the manpower. We
learned some tricks (from the supplier) and applied them here (at the plant) . . . So (in the case
of this tool) we ended up with a 400 percent reduction in forces to move it (the hoist) . . . So
therefore, it was not a throughput issue anymore and not an ergonomic issue . . . (To
conclude) the only suggestion I’ve got is, there’s no “I” in team . . . I’m just here to assist. They

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(the team) did it. It helped cement the marriage between different groups like Production and
Maintenance . . . (no. 2).

Writing a script
Field notes, even when annotated, are not always usable by others. Since our research
group was in regular contact with organizational members – including manufacturing
leaders who participated in presentations where we shared our findings – we needed
user-friendly ways of sharing what we were learning with them. Therefore, we decided
to transform the field notes related to our stories into story scripts.

We began the process of building a script by identifying the “core components” of
the story as recorded in our field notes. We focused on who was present, when and
where the story took place, what action(s) occurred, and what behaviors followed. This
“sifting” technique enabled us to write the Hoist Story Script to reflect the key issues,
behaviors, and outcomes as completely and accurately as possible. Characters, their
interactions, and the eventual outcomes of the Hoist Story formed the plot. All
verbatim quotations captured in the field notes were used in the script. Characters were
always given pseudonyms because they were based on real employees.

We used several script techniques to make the story as understandable as possible.
First, our narrator served as a guide – to explain the context, describe what was going
on, foreshadow actions, and offer insight into the characters’ perspectives. Second,
“stage directions” provided specific detail on character actions (e.g. Dan: [standing in
the doorway of Ed’s office]; Ed: [clearly agitated]). We suspected that some of the
stories would be “performed” by actors (e.g. as part of a training class, work group
discussion); if so, the stage directions would help the actors visualize the sequence of
actions and the importance of non-verbal communication. Third, we divided the Hoist
Story script into six scenes based on the key events in the story:

(1) The Recordable;

(2) The Proposal for the Buy Off;

(3) Encountering a Technical Glitch;

(4) Soliciting Solutions;

(5) Permission for the Buy Off; and

(6) A Cultural and Technical Success.

Dividing the story into scenes enabled us to break down the reported activity and
events in the story, highlighting character action and inaction.

Sometimes we had to create additional dialog to ensure that the script would be
understandable. For example, we knew from the field notes that a meeting occurred
with the supplier’s design engineer after the first ridge rail had been installed.

(Their design engineer) came in with an attitude that “We’ve built 100 of these (ridge rails)
and there has never been a problem.” After the team convinced the design engineer to use it
(the hoist) for himself, after loading three hoods he said, “This is too hard.” For me, . . . I gained
credibility with the team since I didn’t leave it (the ridge rail issue) alone. Then the supplier
agreed that there was a problem and that they would work with our design suggestions.

From the field notes, we created a named design engineer (Tad) from the supplier, and
particular team members (Jonathan and Susan) with whom he interacted. Their roles,

A story’s impact
on change

actions, and non-verbal expressions were consistent with the storyteller’s perspective.
The script, with stage directions in brackets, reads:

Tad: [sounding off to the team] “We’ve built 100 of these and there has never been a problem.
We always do a job to spec.”

Jonathan: [to Tad] “We know you follow our specs. Go ahead. Try it out. See what you think.”

Tad: “Oh well, OK.” [Tad puts on gloves and pushes the hoist three times with increasing
levels of effort] “Uhhh! Man! Well, you’re right. This is too hard. There is a problem” [He turns
and picks up his clipboard].

Susan: [to Tad] “We have some suggestions for you on how to reduce the forces.”

Just as we validated our understanding of the hoist issue by returning to interview the
engineer a second time, we also sought to validate our script. Some feedback pertained
to the dialogue among the character – for those interactions that were not well
documented in the field notes. One of the union leaders pointed out, “They [plant
employees] don’t talk that way.” We worked with this individual to make selected
wording changes in the script so that the script reflected the general way in which
plant personnel communicate with one another (e.g. replacing the word “you” by “you
guys”).

Performing a content analysis
We conducted a content analysis of the Hoist Story to identify the key cultural themes
that emerged. The preliminary analysis revealed cultural disconnects or breakdowns
as some of the characters engaged with each other in the course of doing their jobs. For
example, the manager denied the engineer the opportunity to conduct a buy off, and
then subsequently accused him of not solving the hoist problem. The engineer blamed
the manager for not allowing the buy off in the case of the initial ridge rail and later
shamed him into permitting a buy off prior to the installation of the second ridge rail.
We also learn that the design engineer from the supplier arrived at the plant “with an
attitude,” reflecting his initial opposition to engage in problem solving with the team.
The interactions between the engineer/team and the manager reflected, in part, the
theme of power as it manifested itself within the plant’s hierarchical structure. The
poor quality of these interactions also can be attributed to the engineer’s strong belief
in the notion of empowerment. The engineer’s belief was that the team (employees and
the suppler), working together, would come up with the best solution to the hoist
problem. These two opposing positions of hierarchy and empowerment led both to
escalating conflict and long-term damage to plant relationships.

The Hoist Story also exemplifies the theme of collaboration. A cooperative
orientation to the work was immediately evident in the way the engineer worked with
the other plant departments (e.g. Ergonomics, Maintenance) and engaged the operators
in problem solving. He took the time to solicit their input for a re-design of the ridge
rail, and then used it to develop an appropriate engineering solution. While the
engineer and team faced some initial difficulty due to the “attitude” expressed by the
supplier’s design engineer, they were respectful, proactive with their suggestions, and
persuasive in their approach. By asking the design engineer to experience the hoist as
the operator might, the team was able to secure his agreement in addressing all the
problems associated with the ridge rail. Though the potential was present for the

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team/supplier interaction to lead to significant discord, a “can-do” spirit pervaded the
exchange which ultimately leads to the installation of an appropriate ridge rail.

Comparing the content analysis with the larger data set
Additional insights can be derived when stories are situated within the larger data set.
In our case, we examined the story in relation to the four-quadrant Ideal Cultural Model
and its associated cultural obstacles and enablers. The Hoist Story revolves largely
around a disagreement about a particular work practice – the buy off. However, we
know from our years of field work in manufacturing environments that the cultural
breakdowns between the engineer and manager reflected fundamentally different
orientations to getting the work done.

The clash that emerges in the Hoist Story illustrates the tension plant personnel
were experiencing on their journey from a hierarchical and authoritarian past to a
unified and cooperative approach in their “ideal” future. The story indicates that
organizational members face key cultural obstacles in their quest to get as close as
possible to an ideal plant culture including: cross-cultural conflict (between the
engineer and the manager, each representing different functional areas in the plant,
and initially between the engineer and the supplier), ethnocentrism (the manager’s
conviction about buy offs and unwillingness to consider an alternative viewpoint, and
the supplier’s view that there has never been a problem with his ridge rails), and
resistance to change (in both the supplier’s initial response to the ridge-rail problem,
and the manager’s subsequent response to conduct a buy-off after the ridge-rail was
re-built).

The Hoist Story also is replete with enablers whose job is to mitigate the obstacles
to organizational-culture change. The key Plant Environment enabler is improving
ergonomic standards. Work Force enablers include exhibiting a people-centered
orientation, demonstrating involvement and commitment, serving effectively in a
given role, and responding to tasks quickly and effectively. Work Practices enablers
encourage work-group problem solving, empowering employees, sharing and using
lessons learned, setting clear expectations, sharing responsibilities, and providing
support. Relationship enablers include proactive listening, showing respect, and
creating a win-win orientation. All these enablers represent opportunities for action
that can be taken by organizational members to accomplish their culture-change goals.

Sharing the story script and content analysis
Next, we began sharing the Hoist Story script and its analysis as part of
presentations within GM’s manufacturing function. In one discussion, we framed the
Hoist Story in terms of “soliciting” vs “disregarding” cross-functional input (see
Figure 2). The first column identifies those portions of the script where advice and
input was sought. For example, the engineer solicited the views of the operators.
Later, the engineer and the team asked that the supplier’s design engineer try out
the hoist and provide feedback. Cooperation pervades these cross-functional
interactions. The second column represents those portions of the script where
cross-functional input was disregarded. It occurred first when the engineer asked
production management for permission to do a buy off. It occurred again when the
engineer petitioned a second time to conduct a buy off. Ultimately the manager
granted the request, though he did so reluctantly. When reading the story from start

A story’s impact
on change

to finish, the sequencing is as follows: top of the first column to Insert A, followed
by Insert A (top of the second column), and then bottom of the second column to
Insert B, followed by Insert B (bottom of the second column).

Engineering and production management appear on opposite sides of the functional
divide. This pattern is consistent with GM’s longstanding history of autonomy in
which organizational units such as functions are optimized at the expense of the larger
whole – in this case the plant (Briody et al., 2004). Our goal when sharing the Hoist
Story was to raise awareness of the pattern so that attendees would be able to
experiment with solutions that might perforate such organizational boundaries.

In a later discussion with a different group, we talked about the importance of
securing consensus across functional and job classification boundaries to ensure plant
effectiveness. This time we offered a “recipe” from the Hoist Story consistent with the
overarching theme of collaboration emerging from the larger data set. The recipe was
phrased as follows: Involve team members and other stakeholders in problem solving
to increase the likelihood of a successful outcome – both technically (e.g. a ridge rail
that works) and culturally (e.g. strong, healthy relationships). We commented on the
benefits of following such a recipe: improving job satisfaction while reducing
micromanagement, having a high confidence in the technical outcomes, and building
and maintaining relationships within the work environment. We also used this
presentation to reinforce collaboration as the single-most important feature in an ideal
plant culture.

Figure 2.
The Hoist Story as a
symbol of the functional
divide

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Transforming the Hoist Story into specific applications
As we refined our analyses and presentations for study participants, we started to
compile story materials and other data with a similar focus. The result was the beginning
of a series of ten stand-alone “applications” that could be used to address critical
organizational-culture issues (see Appendix). The broad outlines of the Hoist Story
appeared first in the “Story Packet,” a tool that documents and analyzes stories to provide
some explanation for the valued elements in plant culture. The Hoist Story’s “recipe” as
reported above was included in an application called “Recipes for Cultural Success.”

Over time, these applications became known as “Collaboration Tools” since
collaboration was the dominant cultural theme in the data set. The content, focus, and
problem-solving exercises associated with the Collaboration Tools help plant
personnel develop, strengthen, or maintain a culture of collaboration. The structure
and flow of the Collaboration Tools are similar. Background material orients the user
at the start of each tool. For example, it introduces a cultural problem that the tool can
address. Next, a general description of the tool appears, along with the tool’s goals and
suggestions for how, when, and where the tool can be used. In the explanation portion
of the tool the cultural problem is described and explained in detail. Insights are offered
about ways of addressing the particular cultural problem. Finally, a set of exercises
offering practice in cultural problem solving completes each tool (see Figure 3). The
intent of the exercises is to reinforce the notion of working collaboratively and
cooperatively with others in the work environment.

Adopting the script for use in plant training
About 18 months after we first heard the Hoist Story, we learned about a three-day
training class that was intended to reinforce the concept of teamwork on the plant floor.
One of the trainers contacted us and said his group had been charged with developing
training material for employees who would be working at a new GM plant. The
training built on the new plant’s mission in which the concepts of empowerment and
support were embedded, and on some team leader training conducted several months
earlier. The trainer indicated that he was eager to show us their modules on building
relationships among co-workers – a theme they adopted from the ideal culture project.
This was the first time we were aware that study participants were actively integrating
our work into their own.

During that meeting, one of the trainers mentioned the Hoist Story script.

You’ll see the Hoist Story as part of our training . . . Basically we’re looking at interaction
skills, feedback fundamentals and conflict management. . . We also have a whole section on
the Hoist Story. What makes this story great is that it is so realistic. [The consulting firm
working with us] did have a few manufacturing examples that they played out with
professional actors but most of their examples were from office environments so this example
is much more appropriate for us . . . What we hope the Hoist Story will do will be at least to
start the dialogue about behavioral expectations.

Later in the meeting he indicated that the Hoist Story had been incorporated into their
“capstone exercise,” meaning that it would serve as the focal point for the discussion of
team-related concepts and exercises. Interestingly, we documented the Hoist Story at
another GM plant in the same region as this new plant.

Four days later, the first teamwork training on relationship building was completed.
The following day we received this email from the lead trainer:

A story’s impact
on change

The Hoist Story was well received by the participants. A group of folks are making a video
tape of the script at the Body Plant this Morning for use by future training classes. People
could easily relate to the characters and behaviors which provided the basis for some robust
discussion and learning. It should be interesting as other classes are conducted. Thanks again
for your support and help as we tackle the challenges of building a new plant and engaging
the work force.

For us, the receptivity of the training participants signaled a validation of the cultural
issues emerging in the Hoist Story and the ways in which organizational members
sought to cope with them, rather than simply the validation of the story’s narrative
details.

Producing a video tape from the script
The email above indicated the plant’s intent to make a video of the Hoist Story script.
Within two weeks, we received confirmation that the video tape had been made and
incorporated into the training program. According to the lead trainer, “It was filmed in

Figure 3.
Structure and flow of the
collaboration tools

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[the Body Plant] and is pretty good!” In a return email we indicated how pleased we
were and asked for a copy. The video was a joint effort by both GM salary and hourly
UAW[3] employees and had a running time of 14:56. Employees played the roles of the
characters and performed the various pre- and post-production functions
(e.g. narration, music).

Developing exercises for the video tape
The video was used towards the end of the training to gauge how well participants
grasped the focus on relationship building. One agenda stated it this way: “The Hoist
Story capstone activity will provide you with an opportunity to apply newly acquired
skills in a case study situation.” The lead trainer indicated, “We run the tape in scenes,
and have the class members look for various aspects of GM core values . . . , [material]
on interaction skills, and effective feedback.” At the end of the video, groups of
participants were responsible for completing three exercises:

(1) Step 1 involved evaluating interaction skills for success, the use of GM core
values and enablers, or the use of feedback.

(2) Step 2 focused on examining how the Hoist Story “interactions appear to be
impacting the situation.”

(3) Step 3 required a presentation summarizing issues such as the core values that
were at risk in the Hoist Story, and conflict resolution tactics that were used or
should have been used by the characters.

Feedback from the lead trainer indicated, “It (the video and follow-up exercises) is a
good learning tool and is being received positively.”

Requesting conflict resolution material
Next, we received a request via email from the training staff for new course material
from our data set. The email read:

We are planning on developing a stand along Conflict Resolution training course . . . What we
are envisioning as a potential activity is a role play very similar to the Hoist Story centering
on how conflict starts and escalates and then how it can be resolved. Real world GM examples
are very well received and identifiable. Please give this some thought and drop me a line.

Our initial response to this email was:

Yes, we have other stories we can send you. [We are] finalizing a script for you . . . in which
employees were asked to select a spot for the team room area, and then were told by
management it was not acceptable. The story illustrates how the issue was solved.

This request opened up a new opportunity to encourage the evolution of the
organizational-culture-change process in which this plant was engaged. We sent of the
Marking the Team Room story script as promised. However, we believed that the Hoist
Story script was the best example we had of both unresolved conflict (with the
manager) and conflict resolution (with the supplier). We also thought that we could
enhance the training exercises used after the Hoist Story video was shown.

A story’s impact
on change

Creating the workplace disagreements collaboration tool
The centerpiece of the Workplace Disagreements Collaboration Tool is the Hoist Story.
It provides a framework for plant personnel to analyze and solve common conflicts
within manufacturing environments. Whether used by individuals or groups,
including facilitated discussions, this tool can be useful in learning about and
developing strategies to deal with different types of conflict. Users of the tool can either
watch the Hoist Story video or read the story script to understand the collaborative and
confrontational behaviors associated with plant-floor interactions. The tool explores
the different sources of disagreement among the story’s characters – including
divergent interests and expectations. It also examines the effects of the unfolding
disagreements on plant working relationships, work practices, and output.

Three sets of exercises complete the tool. For example, the questions in Exercise B
emphasize the importance of maintaining healthy, professional relationships despite
the disagreement (see Figure 4); the questions point users to Appendix, which contains
the Hoist Story script. These questions also introduce the technique of “what-if
scenarios” in which users imagine alternative outcomes in lieu of what actually
happened in the story, and then discuss the implications. The exercises, taken as a
whole, enable users to explore conflict from several points of view and examine the
impact of conflict on organizational members and their work culture. We passed on the
final version of the Collaboration Tool to plant and manufacturing leaders as soon as it
was completed.

Evolving to organizational applications
Rarely do stories get told in coherent, linear progression from beginning to end (Boje,
1991b; Czarniawska, 2004). Typically, stories undergo repeated transformations as
they are told and re-told. We build on this perspective by suggesting that a single story
can evolve into new cultural forms that include but are not limited to the narrative
itself.

We label the cultural forms that emerged as applications or packaged products.
They were developed largely in sequence, each one dependent upon and reinforcing its

Figure 4.
Sample exercise from the
workplace disagreements
collaboration tool

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25,1

predecessors. The Hoist Story was the catalyst for the development of all subsequent
initiatives – the story script, three Collaboration Tools, a video tape, and training
exercises. The evolutionary course of the Hoist Story, from the initial telling to the
resulting set of applications, is illustrated in Figure 5.

We call attention to the structural aspects of this evolution. Notable about the
evolutionary structure is the way in which the elements are sequenced and layered. A
certain linearity pervades the chain of actions (evident in the single-sided arrows)
terminating when activities shift either from researchers to study participants, or from
study participants to researchers. The structure mimics the “turn taking” associated
with conversations (Boden, 1994; Drew and Heritage, 1992) or the “action chains” or
sequence of events in which people participate (Hall, 1976). Change is embedded in
these modifications in the conversational flow as the parties move their dialogue
forward in unanticipated directions. Both researchers and study participants are
necessary conditions for having a conversation, and both are fully engaged in the
evolutionary process, reflecting the pattern co-production. Each kept seeing
opportunities to shape the organizational-culture changes in particular ways and
each played a distinctive role in contributing to that effort. Researcher actions (in
bolded font) can be classified generally as analytical while study participant actions (in
regular font) are largely pragmatic and resourceful. Some cross-exchange (evident in
the double-sided arrows) appears at the turning points in the structure, indicating the
saliency of those particular interactions as a new round of actions gets underway. Just
as conversations switch from one party to the next, so too does the structure of the
Hoist Story as it is transformed from a descriptive narrative to a powerful set of
organizational-culture-change tools (Hall, 1976).

Organizational-culture change can result from and be sustained by the power of a
story. The Hoist Story is strong evidence that stories not only have an individual

Figure 5.
A story’s evolution to

organizational
applications

A story’s impact
on change

impact (Bryant and Cox, 2004), but an organizational impact as well. It provides a point
of contrast with much of the management literature on “planned change” where change
goals and processes are designed and delivered by top organizational leaders (Beech,
2000). The Hoist Story is an example of interactive and integrated change involving a
cross-section of organizational members. It represents change “in the middle” or
change at the “organizational core.” The pattern of change, described as organic,
serendipitous, emergent, and unplanned resulted in organizational buy-in – a critical
ingredient in an organization’s readiness for and ability to change (Fronda and
Moriceau, 2008; Chreim, 2007; Armenakis et al., 2001) – and packaged products that
were developed and implemented. Rather than reflecting the hegemony of a
managerialist approach (Vickers, 2008), the Hoist Story and its sustained impact
actually reflected a consensus view of organizational members. The sculpting of
manufacturing culture became a collaborative, participatory, and reciprocal effort
between organizational members and researchers, while the sculpture that resulted
symbolized the valued attributes of the ideal plant culture. This story had the effect of
spearheading the change process so that that process was viewed as credible, relevant,
and realistic – just as the story has been perceived.

Epilogue
Our research group has spent much of the last eight years on the Ideal Culture Project.
In addition to research reports and a book (in preparation), we completed ten
Collaboration Tools for use within GM’s manufacturing operations. The tools,
described in the Appendix, have been copyrighted and released for use outside of GM
by organizations, institutions, and communities.

We have disseminated the findings and recommendations from the project
throughout GM. We have worked with the senior manufacturing managers in the firm,
as well as senior UAW leaders, to gather their views on the ideal culture project, raise
their awareness of the availability of the Collaboration Tools, and garner their support.
Knowledge of the availability of the Collaboration Tools grew during the validation
and pilot testing phases. The tools have been finalized and delivered to manufacturing
process leaders for formal inclusion within GM’s manufacturing system.

Notes

1. The cultural transformation process is discussed in greater detail in Briody et al. (2010).

2. The Relationships quadrant focuses on healthy, positive interactions that are the glue
cementing the organizational culture together. Work Practices stipulates how the work gets
done by working together, recognizing success, and sharing information. Plant Environment
consists of the location and inclusion of physical structures (e.g. bathrooms, team rooms) and
technology (e.g. equipment) that nurture collaboration and effectiveness. Work Force
emphasizes the people skills and technological competencies along with appropriate and
sufficient training that reinforce a strong work ethic.

3. United Automobile, Aerospace and Agricultural Implement Workers of America.

4. The Collaboration Tools are described in detail in Briody et al. (2010).

JOCM
25,1

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Appendix
We developed ten applications or tools to assist manufacturing employees in moving towards
and reinforcing their cultural ideal – a culture of collaboration[4]. Consequently, we refer to these
applications as the Collaboration Tools (Briody et al. 2007; Briody et al., 2008). The tools are
grouped based on their primary function: understanding collaboration, practicing collaboration,
measuring collaboration, and making decisions consistent with a culture of collaboration.

Tools for understanding collaboration
Four tools help promote an understanding of the critical elements of an ideal plant culture and
how plant cultural conditions can be improved.

. Ideal Cultural Model – This tool is the foundation for all of the Collaboration Tools. It
provides a conceptual view of the ideal plant culture – one based on a culture of
collaboration – from the standpoint of GM employees. The Ideal Cultural Model consists
of four quadrants – plant environment, work force, work practices, and relationships –
into which all named features of the ideal plant culture can be categorized. Collaboration
emerges as the central theme and encompasses the elements of unity, cooperation, and
joint work.

. Cultural Toolkit – This tool describes and explains the primary elements of the Ideal
Cultural Model, identifies the obstacles that will be encountered in trying to improve plant
culture, and specifies the enablers that can help enhance plant culture and cooperation.
The Cultural Toolkit focuses on cultural change and the mechanisms for achieving it. The
exercises can be used as a problem-exploration process, or as a specific problem-solving
instrument. They are designed to be action oriented, moving from problem identification
to problem resolution.

. Story Packet – This tool includes a set of plant stories that highlight a variety of topics
and issues pertaining to an ideal plant culture. The stories illustrate examples ranging
from the “old way” to those reflecting the ideal. The exercises are designed to facilitate
cultural learning and evolution towards the ideal by providing examples of desired
behaviors contrasted with “warning” stories from current (or past) plant culture. The
exercises use the Ideal Cultural Model to suggest ways to move towards “walking the
talk.”

A story’s impact
on change

. Recipes for Cultural Success – This tool offers a set of guidelines for the behavior of all
plant personnel as they move towards, and attempt to maintain, a culture of collaboration
based on the Ideal Cultural Model. It helps plant personnel cope with change by providing
a Ready-Reference Card of preferred behavioral qualities in effective plant cultures. It is
also useful in helping plant personnel understand the value of and expectations associated
with a culture of collaboration.

Tools for practicing collaboration
Three tools help employees gain collaborative skills and practice in achieving ideal cultural
goals.

. Collaborative questions – this tool provides training in a technique that individuals can
use to ask questions when there are issues that need to be solved in their work
environment. It emphasizes the importance of asking questions in a neutral, objective way
so that collaboration is enhanced. It also improves plant personnel’s abilities to ask
open-ended, non-judgmental questions so that they may obtain more complete, detailed,
and accurate information, and make better decisions.

. Cultural “Hot Spots” – this tool provides a procedure for opening up discussion on known
cultural clashes in the work environment so that potential solutions to those clashes can
be developed, and the positive elements of the ideal culture can be reinforced. It is
particularly useful when work groups identify and deal with ambiguous situations –
including the interface of two opposing themes (e.g. empowerment and hierarchy;
standardization and innovation). Plant personnel can test, and subsequently modify, the
solutions they create so that they can contribute as effectively as possible to plant
operations.

. Workplace disagreements – this tool focuses attention on addressing conflict. It includes
a video in which one of the key stories collected during the Ideal Culture Project is
reenacted. The exercises are designed to help individuals and groups analyze and manage
typical work-related disagreements so that any damage to plant relationships, processes,
and work output can be addressed quickly and effectively.

Tools for measuring collaboration
Two tools measure current conditions and the movement of groups and individuals towards an
ideal culture of collaborative effectiveness.

. Work group relationship metrics – this tool consists of a set of work-group-level metrics
that measure seven elements of positive relationships (based on the Ideal Cultural Model)
for a work group or multiple work groups. It focuses on work group dynamics by
examining key attributes of work group effectiveness. The exercises provide a process for
identifying which elements of within-group or between-group relationships are positive
(for reinforcement) or negative (and needing change). The tool’s exercises have a process
for working through the cultural obstacles and enablers to strengthen the positive metrics
and/or reduce the impact of the negative metrics. Work groups can develop
recommendations to maintain their strengths and/or improve their weaknesses.

. Individual relationship effectiveness metrics – this tool is designed to help individuals
measure and then either reinforce or improve their workplace relationship dynamics. It
provides input into the collaborative abilities and behaviors of an individual, along with
the actions he/she can take to create and sustain strong, healthy relationships at work.
Plant personnel can examine aspects of their own everyday actions and activities (e.g.,
engaging in positive interactions, working together on work tasks) and track changes in
their behavior over time.

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25,1

A tool for making decisions consistent with a culture of collaboration
One tool teaches and reinforces collaborative actions and ideals.

. ExplorePlantCulture computer game – this game enables players to learn about the
impact of their decisions on plant culture. It showcases an actual observation of a stud gun
breakdown in a GM plant and the aftermath associated with its repair. Players make
decisions for the game’s characters. Each decision is scored on two key elements of plant
culture – Relationships and Work Process – with a cumulative score and the explanation
for that score at the end of each game.

Corresponding author
Elizabeth Briody can be contacted at: Elizabeth.briody@gmail.com

A story’s impact
on change

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Week 6 Assignment Resources/Cultures role in enabling organizational change

Survey ties
transformation success
to deft handling of
cultural issues

Culture’s role
in enabling
organizational
change

2 Strategy&

Berlin

Carolin Oelschlegel
Principal
+44-7825-67-6472
carolin.oelschlegel
@strategyand.pwc.com

Buenos Aires

Ariel Fleichman
Partner
+54-11-4131-0432
ariel.fleichman
@strategyand.pwc.com

Delhi

Gaurav Moda
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gaurav.moda
@strategyand.pwc.com

Dubai

James Thomas
Principal
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@strategyand.pwc.com

Mexico City

Carlos Navarro
Partner
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carlos.navarro
@strategyand.pwc.com

New York

Rutger von Post
Partner
+1-212-551-6090
rutger.vonpost
@strategyand.pwc.com

San Francisco

DeAnne Aguirre
Senior Partner
+1-415-653-3472
deanne.aguirre
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Shanghai

Tony Tang
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Sydney

Varya Davidson
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Tokyo

Kenji Mitsui
Partner
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kenji.mitsui
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DeAnne Aguirre is a senior partner with
Strategy& based in San Francisco.
She is the co-leader of the global
Katzenbach Center and an expert in
culture, talent effectiveness, leadership,
and change management. She
advises senior executives globally on
organizational topics.

Rutger von Post is a partner with
Strategy& based in New York and is
head of the Katzenbach Center in North
America. He specializes in culture
transformation and organizational design
and effectiveness in the financial-services
industry.

Micah Alpern is a senior associate with
Strategy& based in Chicago and is a
member of the Katzenbach Center’s
operating team. He is an expert in culture
transformation and change management.

About the authorsContacts

This report was originally published by
Booz & Company in 2013.

3Strategy&

For all the money and effort that go into corporate change initiatives,
they have a decidedly mixed success rate. Only about half of transformation
initiatives accomplish and sustain their goals, according to a survey on
culture and change management by the Katzenbach Center.

Among the biggest obstacles to successful change are “change fatigue”
(which occurs when workers are asked to follow through on too many
changes at once) and a lack of the capabilities needed to make major
changes last. Sixty-five percent of survey respondents cited change fatigue,
and only about half felt their organization had the capabilities to deliver
change. Another problem is the tendency for management to exclude lower-
level employees in developing and executing the change plan.

The role of culture was a particular focus of the survey. Although 84 percent
of all respondents think culture is critically important, a far smaller
percentage (less than half) believe their companies do a good job of
managing culture. The same respondents who see their companies’ change
programs as falling short tend to say that culture isn’t a priority in their
companies’ transformation initiatives.

The survey points to the need for companies to take a more holistic approach
to change and to find ways to work with and within the organization’s
culture during change initiatives. This is not to say that culture-enabled
transformation removes the need for formal change management processes
or techniques. It doesn’t. But it does mean that leaders need to rethink how
to drive and sustain change if they want to materially increase the success of
their transformation programs.

Executive summary

4 Strategy&

When they embark on transformation efforts, companies put their
credibility and reputations on the line — not to mention a lot of
financial capital. Are the effort and money well spent? A wide body of
literature suggests that many change initiatives fail, typically in areas
such as process improvement, cost reduction, digitization, and quality
improvement. Even when they initially succeed, their benefits may
not last.

To learn more about what goes wrong with transformation efforts and
what might be done to make them more successful, the Katzenbach
Center conducted a survey of more than 2,200 executives, managers,
and employees (see Methodology, page 11).

Transformation efforts face three major obstacles, according to the
study. The first is “change fatigue,” a dynamic that comes into play
when employees feel they are being asked to make too many changes at
once. Sixty-five percent of survey respondents say they have experienced
some form of change fatigue. The second obstacle relates to companies’
skill at driving transformation; 48 percent of respondents say their
companies don’t have the necessary capabilities to ensure that change is
sustained. The third issue is the way transformation initiatives are
selected, planned, and implemented — by senior managers, without
much input from lower-level employees. This limits understanding and
buy-in. When asked to select the top three reasons people resist change,
44 percent of employees say they don’t understand the change they’re
being asked to make, and 38 percent say they don’t agree with it.

When employees are faced with too many change priorities, aren’t sure
how to proceed, and aren’t even sure that an initiative is good for the
organization, they take a wait-and-see attitude, looking to their bosses for
direction and to their co-workers for clues about which aspects matter the
most. This sort of uncertainty, deep down in an organization, can keep a
change initiative from gaining momentum. (A later-stage obstacle to
change comes in the form of the “boomerang effect,” in which initial
changes start to fade when leadership stops paying attention and moves on
to other priorities.)

Why transformations
typically fall short

Uncertainty,
deep down in an
organization,
can keep a
change initiative
from gaining
momentum.

5Strategy&

A change plan may be especially hard to implement if employees see the
transformation as being contrary to the company’s culture — to the many
things, such as feedback and peer and manager behavior, that determine
(as people often put it) “how we do things around here.” It is for these
reasons that a high proportion of change initiatives fail. Only a little more
than half of all respondents — 54 percent — say change initiatives at their
companies are adopted and sustained.

Turning to culture, it is clear that people understand its importance.
Eighty-six percent of C-suite executives and 84 percent of all managers
and employees say culture is critical to their organizations’ success, and
60 percent see it as a bigger success factor than either their strategy or
their operating model (see Exhibit 1). Still, culture doesn’t seem to be a
priority when companies are trying to drive change, and a deeper
analysis of the data — pinpointing culture’s place in successful change
programs and its place in unsuccessful change programs — reveals some
striking correlations.

60%

48%

…agree that their organization’s culture is critical to business success

…say culture is more important than strategy or operating model

84%

44%

47%

45%

51%

…do not feel their culture is being effectively managed

…do not feel culture is an important part of the leadership team’s agenda

…think their organization’s culture is in need of a major overhaul

…say culture change should take less than one year

…think, other than communications and leadership alignment, they do not have the capabilities to effectively deliver change

…barrier respondents said prevents sustainable change is there are too many competing priorities, creating change fatigue

…reason respondents resist change is they are skeptical due to past failed change efforts

…reason respondents resist change is they do not feel involved in the change process

Exhibit 1
Key Findings – The Importance of Culture in Enabling Change

Source: Strategy& Global
Culture and Change
Management Survey 2013

6 Strategy&

In particular, when transformation initiatives fall short, it usually appears
that corporate culture was an afterthought. Among the survey respondents
who said the changes at their companies weren’t adopted and sustained over
time, only 24 percent said their companies used the existing culture as a
source of energy and influence during the change effort. Only 35 percent of
respondents who said change efforts hadn’t succeeded saw their companies
as trying to leverage employees’ pride in, and emotional commitment to,
their organizations.

By contrast, cultural levers were at least twice as likely to have played a role
in change programs that had succeeded. Seventy percent of respondents
who said change efforts at their companies were adopted and sustained also
said their companies leveraged employees’ pride in the organization and
their emotional commitment. Fifty-six percent of respondents at companies
where changes had worked said the existing culture was used as a source of
energy and influence.

It seems clear that there’s a disconnect between what many companies say
about culture and how much they attend to it. Only about half of all
employees say their leaders treat culture as a priority on a day-to-day basis.
Fewer still (45 percent) say culture is effectively managed at their companies.
A full 96 percent of respondents say some change to their culture is needed,
and 51 percent think their culture requires a major overhaul. Putting all of
this together, there would seem to be an opportunity, indeed a need, to
evolve culture itself so that it can be used as more of a change lever and, in
some cases, to have culture lead the transformation.

7Strategy&

Leading change with culture

As an enabler of change, culture remains stubbornly underleveraged.
Both the survey data and our years of experience observing a wide
range of companies trying to transform some aspect of their business
or operations suggest that culture is usually pretty far down the
priority list.

Most business transformations are at least loosely based on an eight-
step process first codified by John Kotter of Harvard Business School.
In practice, many change programs disproportionately emphasize
two of the levers he cites — communications and leadership
alignment. Culture is the last step in Kotter’s formula, something
that can be addressed only after new practices have taken hold and
proven their value. And as our data suggests, culture is often not
addressed at all.

These priorities need to be rethought. This is not to denigrate traditional
change levers — including top-level diagnostics, organizational design,
performance management, metrics, and incentives. Depending on the
change initiative, these may all be crucial. But a change effort needs to
lead with culture as part of a more holistic approach if a transformation
program is to have the best possible chance of success. In particular, the
change needs to draw on whatever positive cultural attributes are
embedded in the organization. It also needs to minimize any negative
cultural attributes that might get in the way.

There are several levers that companies should employ as they use
culture to lead transformation — or when they are trying to transform
their own cultures. Among the most important are the following:

• Culture diagnostic: Before you can use culture in a
transformation or change your culture, you need to know your
culture’s strengths and weaknesses. Effectively tapping into the
strengths can give your change initiative the momentum it needs
to overcome obstacles.

• The “critical few” behaviors: Setting a small number of clear
behavioral change goals, which we call the critical few, is a

As an enabler
of change,
culture remains
stubbornly
underleveraged.

8 Strategy&

crucial way of showing workers what you want them to do
differently. By focusing on only a few behaviors, you avoid a
situation in which workers become overwhelmed and as a result
do nothing, hoping the new requirements will just go away (see
“Focusing on the Critical Few,” page 9).

• Employee pride and commitment: The odds of a successful
transformation plummet when morale is bad. Companies must
find ways to connect workers to something larger that they can
believe in — including customer benefits or the satisfaction of
beating a benchmark.

• Informal peer networks and motivators: Culture might start at
the top, but it is reinforced at every level. Having a peer point out
the benefits of change, instead of an executive or manager, is very
powerful and leads to improved behaviors that continue even
when nobody is looking (see “The Power of a Peer,” page 10).

• Storytelling: How did we get here? At companies with strong
cultures, there are usually widely known stories that answer this
question, often about the boldness of a leader or some decisive
moment in the company’s history. These stories can be a source of
pride and a natural way of reinforcing desired behaviors.

9Strategy&

A strong example of putting the “critical
few” concept into practice involves a
global consumer and industrial company
that wanted to change the culture in its
financial shared-services organization.
Morale at the organization was low.
Employees tended to point fingers
rather than accept responsibility and
to be reactive in solving problems. The
organization rarely looked into root
causes, so the same problems kept
cropping up again and again. Because
of these issues, the financial shared-
services group lacked the respect
and trust of other departments in the
company. A feeling that bordered on
hostility hung over the organization’s
interactions with its internal partners.

The organization had a long list of new
behaviors that it could have addressed.
Instead, it focused on a critical few
that everyone could remember and
understand. Among them were taking
ownership for results, soliciting and
providing constructive feedback on
performance-related issues, and treating
an outsourcing firm with which relations
had become contentious as a partner
instead of an enemy.

Of course, it is one thing to set goals for
a transformation and another to achieve
them. Recognizing this, the shared-
services organization broke down

its short list of priorities into a set of
specific behaviors that varied depending
on the actor. The organization’s leaders,
for instance, were instructed to push
employees to come up with longer-
lasting solutions and to praise them
when they did. Internal partners were
asked to be respectful and collaborative
when presenting issues. And the
outsourcing firm — along with the
shared-services organization’s own
employees — was encouraged to look
for the root causes of problems as part
of an overall effort to find longer-term
solutions. In an upcoming phase of the
change plan, that inquisitiveness will be
formalized in a “Five Why” campaign,
in which workers will be trained to ask
why something has happened in five
different ways, if necessary.

The change initiative is starting to
reinvigorate the department and
generate an enthusiasm that had
long been absent. A competition for
operational improvement ideas elicited
288 suggestions from people in the
department. The ultimate vote of
confidence came about a year after the
transformation initiative started. In an
internal survey, 70 percent of the staff
said they believed that the new model
for shared services was essential to
making the department more efficient.

Focusing on the Critical Few

10 Strategy&

Culture is not a shortcut to successful corporate change. Nor is culture-led
transformation less rigorous than more conventional types of transforma-
tion — it involves just as much time and effort. Culture-led transformations
require a fundamentally sound set of change objectives and discipline in
the sense of setting priorities. Performing a culture diagnostic, identifying
a critical few behaviors, capitalizing on employee pride and commitment,
engaging in effective storytelling, and leveraging informal peer networks
are just a few of the ingredients in the change recipe. We will dig more
deeply into these and other factors in a subsequent paper.

Change imperatives

Informal peer networks help an organization
take advantage of employee pride and
emotional commitment. One way to utilize
these networks during a transformation
effort is to identify and leverage certain
people as “pride builders.” These are highly
respected individuals, usually middle
and frontline managers with leadership
qualities who excel at helping colleagues
feel good about their work. The role of
pride builders during a transformation
effort is to show how a new way of doing
something connects to the bigger picture of
the organization’s goal. These individuals
also encourage their fellow employees and
direct reports to embrace the new behaviors
and requirements and to take responsibility
for meeting them. Finally, pride builders
challenge others to come up with innovative
ways to meet the new standards, and
to spread those innovations and ideas
throughout the enterprise.

The tactics employed by pride builders
depend on the initiative and the audience,
but it is often helpful for the tactics to go
beyond the ordinary. Consider the case
of a global technology company, which
identified about 2,000 pride builders to help
translate senior leadership directives into
actions through a focus on the company’s
distinctive culture. Different tactics were
used in different geographies. In Asia, the
pride builders created a game show to
remind employees of the company’s many
assets and cultural strengths. In Europe,
the pride builders set up a photo contest
focusing on the cultural attributes that
were most important at the company. The
company also held a global contest, in
which senior leaders — and eventually all
employees — were encouraged to make
videos about the company’s culture and
how they tried to embody it every day. (The
videos were voted on by employees.)

The Power of a Peer

47% Other
24% Manager
17% Director
12% C-suite

59% Other
11% Operations
13% Planning
17% General Management

35% 0–499 employees

28% >10,000 employees
37% 500–10,000 employees

17% Asia-Pacific
30% Europe, the Middle East, and Africa
53% Americas

20% Public
80% Private

Seniority Company Size

Function Region

Sector

Industry

12% Engineered Product Services
34% Other

7% Energy
9% Finance
8% Healthcare
15% Consumer
15% Retail

11Strategy&

Exhibit A
The survey drew more than 2,000 responses from participants in a range of industries
and geographies

Source: Strategy& Global
Culture and Change
Management Survey 2013

The survey was conducted in May 2013 by
the Katzenbach Center, through an online
questionnaire. We received responses

from 2,219 participants, with a variety of
titles and from many different industry
sectors (see Exhibit A).

These and other tactics boosted employee
engagement scores by roughly 12 percent in
less than a year. They have also contributed
to measurable improvements in a variety

of areas where the company’s performance
had suffered, including product quality,
market share, and top-line growth.

Methodology

© 2013 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further
details. Disclaimer: This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

www.strategyand.pwc.com

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of practical strategists
committed to helping you
seize essential advantage.

We do that by working
alongside you to solve your
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helping you capture your
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These are complex and
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This report was originally published by Booz & Company in 2013.

Week 6 Assignment Resources/Managers as change agents – Implications for human resource

Managers as change agents
Implications for human resource managers

engaging with culture change

Llandis Barratt-Pugh, Susanne Bahn and Elsie Gakere
Edith Cowan University, Joondalup, Australia

Abstract
Purpose – The purpose of this paper is to explore the merger of two large State departments and the
cultural change program orchestrated by the Human Resources (HR) department. This study reveals
the instrumental role played by some managers who accelerated the cultural change process through
utilising formal and informal agencies of change in their management roles.

Design/methodology/approach – The paper explores a two-year investigation of a major State
organisation trying to reshape the culture and values of the organisation after a politically determined
merger. This paper reviews the context for this change process, the associated concepts from the
literature, and adapts Gidden’s Structuration Theory to provide a model of manager action during the
change process that may also be used to explore subsequent change practices.

Findings – The findings from the sequenced phases of data collection provide new evidence from a
strategic HR perspective of the multiple ways managers act to embed a culture change for the
emerging organisation.

Practical implications – The subsequent discussion centres on the diverse roles played by
managers in the new disjointed and often dysfunctional culture to develop unified cultural change with
their staff, with the change process being modelled in terms of Structuration Theory.

Originality/value – The paper uses the findings from an empirical study to indicate the agencies of
change that managers can employ during organisational change processes. By doing so it provides
both a pragmatic model for managers of change and through the typology of manager agencies of
change makes an addition to the existing theoretical frameworks of change management.

Keywords Human resource management, Organizational change management,
Public sector organizations, Australia, Culture change, Managing change, Change agents

Paper type Case study

Introduction
This study explores an organisational merger and the strategies employed by a public
service organisation’s HR department to promote new values and install a more
flexible culture. Digital communication and globalisation has accelerated the pace and
complexity of organisational change. Organisations are continually adapting to
external pressures and radically reshaping themselves to gain competitive advantage.
For public service organisations, previously the domain of bureaucratic stability, these
experiences raise employee anxiety and present considerable HR challenges, especially
when the change involves organisational mergers. Mergers entail the destruction and
re-construction of organisational culture. In the emotional confusion of such change
processes, HR may be reduced to a regulatory role, burdened with continual
recruitment of changing positions and managing the out-placement and traumas of

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0953-4814.htm

The authors wish to acknowledge Ms Elsie Gakere for her work on the project as an embedded
researcher and the DPI HR department who were co-researchers in this study.

JOCM
26,4

748

Received 3 February 2011
Revised 21 October 2011
11 September 2012
6 November 2012
Accepted 6 November 2012

Journal of Organizational Change
Management
Vol. 26 No. 4, 2013
pp. 748-764
q Emerald Group Publishing Limited
0953-4814
DOI 10.1108/JOCM-Feb-2011-0014

displaced employees. How can HR managers construct a more strategic approach to
change management and cultural change, and what might be the components of such
an approach? It was from discussions with HR managers about a merger between two
leading State departments that this research study was devised to provide them with
some insight into what was happening within the organisation, and how they could
best use their resources to accelerate a change in values and embed a more flexible
culture. We engaged in discussion with the five most senior members of the HR
department, who reported to the department CEO and were responsible for almost
4,000 staff in this leading State agency. Collaboratively we devised a research study to
provide them with some insight into what was happening within the organisation, and
how they could best use their resources to accelerate a change in values and embed a
more flexible culture. While the complexity and failure of organisation change
programmes is well documented (Beer et al., 1993; Beer, 2009), little has been written
about the value of HR activity in supporting organisational development (Ulrich and
Beatty, 2001).

We present the broad background of the case study, followed by a review of the
relevant literature, a narrative overview of the findings and a discussion of the
emerging key issues, with the conclusion confirming the key messages for various
stakeholders.

Case study background
A political decision in 2006 determined a merger between two state government
departments in Western Australia. The government wanted to merge the State
departments of Planning and Transport to form a new “lead agency” to manage
increased production in the resources sector, and to ensure such development was
regulated, harnessed and supported.

The existing Planning department was small and centralised, comprising of highly
qualified staff making critical developmental decisions about State expansion. In
contrast, the Transport department was a large regulatory organisation in multiple
locations managing the licensing of vehicles, boats and drivers across a vast
geographic area. The HR department of the newly merged Department for Planning
and Infrastructure (DPI) recognised the complexity of the task and their instrumental
role in shaping a new culture and engaged with university researchers to develop a
collaborative investigation. The project goal was to gather perceptions from staff about
the change process and to provide feedback. The HR department wanted to know what
actions would have the greatest “utility” in supporting the change process towards a
unified, vibrant and flexible culture, responsive to the public demands and government
policy changes. They conceptualised this goal as “Dynamic Resourcing”. This led to a
change of fixed staffing configurations to multi-skilled and flexible staff that were
reconfigured as teams around emerging issues, needs and directives. The HR
department workshopped this vision through the organisation and collaboratively
constructed a set of “values” for the new culture that were widely and continually
distributed.

The relevance of this study for other organisations was evident as accelerating
change within public institutions seemed to be a universal concern. While business
was being driven by global and technological change, public bodies were adapting
from rigid stable bureaucracies to more flexible customer service and a focus on
performance measurement. This study reflects these moves towards new public sector
managerialism and provided a unique opportunity with an embedded researcher and a

Managers as
change agents

749

longitudinal project, to examine such an environment and increase understanding of
the role that human resource managers can play.

HR and change management
This paper is concerned with the role of HR during organisational cultural change. We
were influenced by Wanda et al. (1997) in defining change management as the
systematic, continuous and iterative practice of altering specific workplace systems,
behaviours and structures to improve organisational efficiency or effectiveness. We
based our definition of culture on the work of Schein (1991, 1995) and Sanchez (1996),
as the patterns of shared assumptions and enacted values, developed through and
embedded within social interaction, which guide evolving social practice. Cultural
change is therefore when these patterns and shared assumptions are disrupted and
reconfigured, as in a merger between these two large State departments. The following
sections provide an academic context for the study by detailing current conceptual
understanding of the relations between strategic human resource approaches and
organisational change, and the emerging focus on organisational values within
cultural change. The review will also explore the nature of change agency and
resistance to change, concluding by focusing on change in the public sector.

The relationship between HR and organisational change reflects the increasing
focus on human resources as a source of strategic advantage rather than a peripheral
component of production. The literature describes a torturous and unconfirmed
relationship between HRM investment and subsequent improvement of business
performance. Gathering such evidence is problematised by the many contextual
factors that mediate the relationship (Dess and Robinson, 1984; Emery et al., 1997;
Billett and Cooper, 1997). Kane and Hermans (1996) indicate that HRM approaches are
themselves diverse, and encompass regulatory, resource based and partnership
models. However, some studies support a positive relationship between “strategic” HR
activity and business benefits (Becher and Gerhart, 1996; Huselid et al., 1997). Huselid
et al. (1997) indicate that in a world where capital and technology are equally accessible
to all, strategic HR practices may be viewed as the key to achieving competitive
advantage. Although, Rogers and Wright (1998), suggest such a relationship is neither
consistent nor universal. It appears the impact of strategic HR activity is greatest
where bundles or configurations of micro strategies are used simultaneously (Dyer and
Reeves, 1995). Lepak and Snell’s modelling (1999) suggests that effecting
organisational change through strategic HR practices is best achieved through
“alliance making” with organisational partners.

Beer et al. (1993); Beer, 2009) insists that most change management initiative fail.
While the change direction may be misguided in some cases, it is the failure to
communicate with, engage and change the behaviour of staff that underpins such
failure. Traditional HR approaches regulating employee employment do not facilitate
behaviour and culture change. Legge (1995) described these traditional “hard” HRM
strategies as those that are concerned with prescribing performance, objectifying
employees, enclosing, partitioning and ranking them according to a plan (Townley,
1993). This approach achieves only employee compliance, with order performed
though position statements, competencies and performance reviews. Payne (2000)
suggests that this HRM approach potentially disorganises, by producing only weak
symbolic compliance, and allowing each micro “community” within an enterprise to
organise their own local meaning. It is intervention within such communities that
underpins a more strategic approach by HR. Traditional HRM approaches to change

JOCM
26,4

750

focused simply on locating employees in time and space. However, the growth of
knowledge work has made such patterns increasingly obsolete as organisations
demand employee participation, engagement and creativity to change and improve
business practice. As Du Gay (1996) and Gee et al. (1996) would insist, if your business
is now about the production of identity, rather than production of commodity, then
regulating your employee’s identity is counter productive. Enabling employee
development with enable organisational development, and such a goal becomes a
critical HRM project. Motivating employees to consume new texts and develop
extended identities displaces the previous HRM pre-occupation with locating bodies
(Legge, 1995). In scenarios of complex organisational change traditional HR
approaches become entwined with regulating human movement during the change,
while more strategic “softer” approaches facilitate employee engagement with new
values and changing behaviour. Organisational Development practices have a long
history in promoting such soft approaches to organisational change and specifically
cultural change (Argyris, 1994). As Beer (1998, p. 6) indicates:

Two overarching theoretical perspectives about organisational change exist. Agency theory,
propagated by economists, emphasises the importance of linking top management’s
incentives to the creation of economic value for shareholders. Behavioural theories emphasise
the importance of participative processes which develop commitment to the change.

Organisational development approaches to change are normative in nature, focusing
on movement to new norms as a means to improve organisational performance rather
than an implicit focus on performance targets. Organisational Development
approaches also mirror the increasing emphasis on relational management skills
rather than the traditional focus on promotion for technical skills. However, Dunphy
and Stace (1988) argue that no singular approach to change is sufficient and that
transformation, incremental, coercive and participative approaches can all make
contributions according to context.

In this case study the DPI produced a vision of how they would like the new
organisation to be and portrayed their vision to the organisation through a new set of
corporate values (Branson, 2008). Kotter and Hesket (1999) indicate that values-led
companies are equated with high performance. Sullivan (2002) suggests that the
realignment of organisational and individual values is a powerful change management
tool. However, Whiteley (1995) indicates the painful collective experience of any
organisation attempting to change their values. The simple “text” statement has to be
followed by vigorous internal debate to achieve changed actions in practice. As
Gidden’s (1984) structuration theory suggests; it is the structure of the organisation
that continually regulates individual performance. It is only through conversations
that question and reframe the organisational structure that momentum is gained to
adapt the existing structure, so that new behaviours are encouraged and regulated
within the organisation.

Change agency
Human resource professionals recognise that managing change in organisations is
often a difficult, emotional and lengthy process that requires skilful negotiations. A
strategic HR approach is about communicating, engaging and activating staff within
the change process, rather than expelling resources on “sweeping the floor” after the
change process has occurred by managing transfers, redundancies and out-placements
(Legge, 1995). During a change process the managers and employees involved can

Managers as
change agents

751

often be classified into two groups: the change agents (usually managers) and the
change recipients (usually employees). Ford et al. (2008a, p. 362) define these roles, with
change agents being described as those that are “doing the right and proper things
while change recipients throw up unreasonable obstacles or barriers” that block the
change process. In reality, HR deals with the continuum of behaviour stretched
between theses polar opposites. Supporting this perspective Dent and Goldberg (1999)
and Klein (1976) describe change agents as “undeserving victims of the irrational and
dysfunctional responses of change recipients” (Ford et al., 2008a, p. 362). However,
Ford et al. (2008b) and Caldwell (2003) argue that often change resistance is actually
instigated by change agent behaviour. Ford describes three “sides” to the change
“resistance story” told by change agents. First, resistance may be viewed as a
self-serving label, tied by change agents onto the necks of those resisting change.
Second, the change agents own behaviour can promote resistance breaking existing
trust (Cobb et al., 1995; Tomlinson et al., 2004) and personal relationships (Pfeffer,
1994). Third, resistance to change may be a positive contribution to the change process
by challenging emerging values (Knowles and Linn, 2004). Both the change agents and
change recipients engage in sensemaking through the change process that Thomas
et al. (1993) describe as actions that involve information seeking, application of
meaning and their responses to the change process as activists in the change process,
increasing activism and disbursing resistance. Change agents seek to determine
strategies to facilitate the change process; whereas the change recipient endeavours to
determine how the change will directly affect them (Gioia et al., 1994).

The early investigation of change processes by Berman and McLaughlin (1975)
highlighted the critical need for processes of “mutual adaptation” whatever the origins
of the mobilisation process. This work is supported by Beer et al. (1993) and Schein and
Greisis (1989) who suggest that organisational development and change is neither
rational nor consensus based, but rather a plural political struggle to gain employee
support (Caldwell, 2003). This study supports the work of Ford et al. (2008b) and
Caldwell (2003) in that we argue that the extent of change agency varies from person to
person within organisations. This is where the challenge presents itself for the human
resource manager, how do they manage change agent engagement and development
when there is a requirement for rapid and successful change? In the end it is about
generating sufficient supporters within the organisation that will “live” the values of
the emerging organisational culture, otherwise it will simply never exist.

Building change dialogue
In any change process change agency will be counterbalanced by resistance to change
and this is an issue for HR strategy. Parish et al. (2008) suggest that there is a
management belief that change recipients can change without disruption to their work
flows and that HR and change agents should give greater consideration to the impact
of change on employees. Dvir et al. (2004) maintain that working with change
recipients in forming a vision in which they all share, supports behavioural
organisational change. It is these personal relationships between change agent and
recipient that are crucial to affecting lasting change (Pfeffer, 1994). Johnson et al. (1990)
found that employees who have supportive managers are more committed to their
organisations and Ford et al. (2008b)) argue that local manager-employee relations are
an important feature of the successful change process. In addition, a trusting
relationship between change agents and recipients further supports organisational
change (Ford et al., 2008b). For HR managers, development strategies that breed

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management change agency may be a positive ways of combating organisational
resistance, although a comprehensive HR strategy must address both issues. Ford et al.
(2008b) in their inductive case study investigation illustrate how senior managers can
shape or craft culture to give their staff formative experiences that may change
behaviour patterns. HR strategies can be focused on using culture and senior managers
as instruments of change.

Beer et al. (1993) and Schein and Greisis (1989) studied a great number of
educational change initiatives and found that where they started change at the top or
the bottom of the organisation did not matter. What did matter was that people in the
middle of the organisation started acting differently and became agents for the change;
changing their practices and encouraging change in others. This was the most critical
strategy to install continued change and move towards the institutionalisation of
change. Without middle management support the change process fades and eventually
ceases, with embedded traditions and behaviours re-emerging as the dominant culture.

Public service change management
This study explores an organisational merger within the public service. Doyle et al.
(2000) indicate that change in the public sector has a higher negative impact on change
recipients, who report less satisfactory experiences than those within the private
sector. Andrews et al. (2008) argue that this is because much change within the public
sector is politically driven, hastily planned to tight deadlines, and frequent. Recent
studies of public service mergers have illuminated three important issues (Amiot et al.,
2006; Cartwright, 2006; Williamson and Haspeslagh, 2005). The first is that there is no
such thing as a merger; there is always a partner with less power, with discourses of
distrust pervading the sub-culture of that group. Second, the failure to continually
promote communication about the “new” organisation is a primary cause of
unsuccessful mergers. Third, activities that involve staff in forming the new culture
generate inclusion and cultural ownership. Such findings were used through
collaborative discussions to inform the field questions for our study.

Case study method
A collaborative partnership between the Department for Planning and Infrastructure
(DPI) and Edith Cowan University (ECU) Western Australia was developed to explore
the DPI merger and culture change as a mixed mode case study. The study spanned a
four year period, starting with intensive discussions about the role of HR as the merger
began, and then gathering data about the change process and employee perceptions, in
order to feedback to HR and management evidence that would enable them to develop
their strategies. The study was instigated by the initial traumas of such a major
structural change and was framed to provide HR management with both evidence and
options for strategy development. The research study was framed to determine what
strategies HR could employ to accelerate the process of cultural change. While the DPI
wanted evidence on which to build their own strategies, the researchers sought to
explore a culture change process in action. What made this collaboration unique was
that there were a limited number of larger organisations who understood the concept of
bundling their HR strategies as part of a corporate strategy to achieve culture change,
and still fewer who were implementing such action and seeking external evaluation.
Through a number of formal meetings over a year a project scoping document and
program logic was produced. The role of the researchers was clear. We were to lead the
design of the study by gaining an understanding of the HR managers’ organisational

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needs. We were then to collect data about organisational perceptions using our
“independence” as a critical lever with which to gain more open feedback from staff
about organisational dilemmas. We would then analyse the data and workshop the
findings and strategic options with the HR managers and subsequently the executive
leadership team who would support changes in HR strategy.

The study gathered evidence about how the organisational culture was changing
and perceptions of the HR role within the change process. The goal of the study was to
analyse the evidence collected and to produce advice about how HR strategies and
practices could be realigned to accelerate cultural change towards the new DPI values.
The following three questions shaped the operationalisation of the study.

(1) To what extent are the new DPI Values being embedded?

(2) What HR mechanisms are contributing to those changing values?

(3) What strategic realignment of HR processes may accelerate this process?

The study consisted of three phases. First, there was a broad DPI “Staff Opinion
Survey” completed by more than 60 per cent of the 4,000 employees. This survey asked
employees what was changing and how they felt about the changes. It probed their
perceptions of motivating and demotivating actions, and their experiences within
teams embedding the new “Values”. This data were analysed within SPSS to establish
a baseline overview of the organisational climate, with bivariate analysis identifying
organisational change issues. The second phase was a series of more than 60
face-to-face interviews averaging 35 minutes held with staff at a variety of levels in all
15 sections, to explore the issues emerging from the survey. Finally a series of 30
interviews, averaging 50 minutes were held with executive and departmental
managers to gather their perceptions of the change process, how they were managing
it, and what they thought about HR activity. The iterative nature of the inquiry enabled
each phase to reshape the focus of subsequent investigations as the collaborative team
of researchers and HR managers reviewed the findings. Finally, a workshop was held
with the executive group to explore the findings and debate the implications for the
organisation, and especially the HR department. Organisational access for the study
was excellent enabling both interview processes to run until saturation and
redundancy was reached. The sole limitation on the study was gaining data quick
enough for the HR department to implement changed strategies supporting the cultural
change.

The study findings
The three phases of the study: survey, employee interviews, and management
interviews built iteratively on each other.

The survey was used to gain broad data across the many departmental sections of
the organisation where staff were involved in diverse work routines and located in
many different buildings. The staff survey asked employees to indicate their
perceptions of their role, their wellbeing, their team, their boss, the agency leadership,
and also how their perceptions of the department environment as a workplace was
changing.

The survey presented a mixed picture with staff spread over a continuum in relation
to their attitudes to the change process. The staff response confirmed that the merger
was causing employees emotional distress, dislocating work relations, and disturbing
established work routines. However, some staff indicated positive reactions to formal
and informal changes in their work patterns. While some staff were aware of the new

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cultural “values”, few cited evidence of them being visible or evident in actions. Staff
indicated changes that had both impacted negatively and positively on their work role
with an emphasis on the former. The second phase of interviews were necessary to
determine what practices were changing and how they were influencing work activity
in differing locations. This first phase of the project used the data from the staff
opinion survey to construct a framework for the interviews, the second phase of the
study.

The interviews that followed probed staff about the impact of the change, how this
had affected their motivation and teamwork and the gap between the new “values” and
their daily work experiences. By looking at the DPI through the eyes of the 60 staff
interviewees, we identified some of the sources of staff motivation and de-motivation,
their perceptions of how teamwork and values were being embedded, and the key
“agencies of change”. We defined “agencies of change” as the practices and processes
that appeared instrumental in driving culture change and reshaping organisational
values. Agencies of change included both manager actions and the re-crafting of
organisational systems.

This data confirmed the survey results, and additionally provided workplace
examples of change. It was formative in providing evidence of the critical and
instrumental role being played by senior managers. The responses indicated that
senior managers were key figures who should be the focus of further investigation and
a target group for HR activity, as agents of the change process.

What was evident from the interviews was that employee experiences were
determined by the mode of management they were experiencing. This varied from
section to section dependant on the relational style of the manager. Positive
experiences were usually the result of a high relational and negotiating mode of
managing. Negative experiences were reported by employees whose managers relied
on their technical expertise and formal authority. These interviews identified the
diversity of managing practice in the DPI and uncovered eight major “agencies of
change” used within the DPI. While the majority of the agencies of change were formal,
those with the greatest impact were informal. Managers were using informal agencies
of change initiated project work (92 per cent) and additional duties (85 per cent) to
involve staff in the change. Some managers were using more formal mechanisms such
as acting positions (43 per cent) and position changes (38 per cent) to move their new
units forward. Less visible were the use of formal promotions (20 per cent), transfers
(17 per cent), and secondments (15 per cent). These were the actions generating the
greatest impact on staff in terms of changing values. The data revealed that there was
a great deal of variation in the use and impact of these “agencies of change”. This
diversity was generated by a significant variation in how managers were acting. While
the common denominator in all the “agencies of change” was that they were mostly
initiated by managers to facilitate organisational adjustment to change, the variation
could be explained by significant differences in managing styles. These “agencies of
change” were a handy set of change-management tools used by managers, to
implement the change mandates required in their respective areas. Managers had a
direct influence on all the “agencies of change”, and could largely determine which
additional duties and/or projects to delegate, which secondments, transfers,
promotions or position changes to initiate, and which acting positions to advertise
for their area. This was despite the highly formalised job descriptions existing within a
Public Service organisation.

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Managers had at their disposal formal and informal mechanisms. They used
informal job enrichment strategies to negotiate work requirements and as employee
development tools. Employees responded well to the informal mechanisms to meet
both organisational tasks and development needs. The research indicated that
employees would not only respond to their manager’s choice of “agency of change”, but
were often able to respond to the “agencies of change” put forward by other managers
across linking divisions in DPI. Managers who used formal and informal agencies of
change actively had been far more successful in changing the values and culture of
their department or workgroup. It was evident that managers could classified into
three groups; type one managers who used agencies of change as a primary strategy
with an emphasis on informal agencies of change; type two managers who used some
of the agencies of change but usually with a selected group of staff; and type three
managers who only hesitantly used the formal agencies of change and resisted more
flexible working structures. Type one managers used their agencies of change to
actively promote flexible work practices. They simultaneously varied staff roles,
tackled new challenges and developed the staff involved. The negotiation around such
new work practices reflected the relational emphasis of type one managers who
involved all staff in such negotiations rather than focusing on specific staff favoured
by type two and three managers.

The second series of interviews with the executive managers explored how senior
managers saw their own actions and what support they required. The research
questions probed the impact and issues associated with the change, and the underlying
causes of the change. Managers were asked about their change activity, the
organisational direction and values, the role HR should play and if they themselves felt
“valued”. The following narrative is constructed from their responses and the voices of
the staff focusing on the areas most germane to this paper.

The change experience was described by staff as a period of “churn”, “a ride” with
“huge huge changes” and “constant reorganisation”. The “level of change was
described as almost unbearable” as reorganisations, reviews and shared services
interventions repeatedly shifted organisational relations, “like Groundhog Day”, while
people “suffered from restructure fatigue”.

The management challenge was to embrace the challenges and opportunities as
“people tried to make it work”. The change process required better management to
displace the previous “wandering priorities and leadership. “The restructure could
have done with better people [. . .] more emotional intelligence at a higher level”.
However, the “ties are now broken with people looking for some sense from the
structure”, with the irony being that it was these very “disturbances of structure that
helped to form the new culture”. “There is a looming problem of succession” and
concerns that DPI needed “a generational change” as there was a “middle management
hole”

In terms of staff concerns the previous DPI had been a “drifting culture” where
“direction and clarity” was needed to counter staff “saying where are we going”.
“Temporariness creates instability”, so “before morale was low” with “staff concerned
about security” and “experiencing a contradictory organisation”. There was “bitterness
about contributing and not getting posts”. The change process generated a “degree of
uncertainty” and a “difficult environment” where “jostling with others” for space and
“keeping an eye out for opportunities” was necessary. There was high pressure and
“bruising during the change processes” where “service suffered due to staff angst and
inner turmoil”. Faced with “piles of work”, staff asked “do I want to be here?”. Some

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staff took “the real challenge” because they believed “they were doing something good”
and “kept the business going in crisis”. There was a “lack of trust and communication”
where staff “questioned the nature of the business”. “People always want more
information and to be valued”. “They wanted leadership [. . .] more order and more
priorities”. “Now we are out of the hole” and “more confident in people to stand up and
wave”.

In terms of causes, there was considerable weight of opinion that a “lack of
management skills” was the cause of much past cultural discontent. There were “fairly
embedded concepts of managing”, “a policing culture”, “like going back 20 years”
where there existed a “culture of covering”, “too much micro management”. The
“change was difficult due to poor management”, and although the “restructure was
seen as the panacea”, really “better management is the clue”.

The DPI “is a family of different tribes” where some people “are still smarting from
the takeover” and talking about “foreigners in our organisation”. The DPI “has not won
the battle yet [. . .] too many cultures [. . .] takes time to change”. “DPI hasn’t overcome
the divisions of culture” and staff still express “frustration at bureaucracy”. Employees
felt “under-staffed” and “under-resourced” with “workload being a significant issue” in
some areas where they indicated that “positions are under classified” and raised issues
of organisational parity.. However, staff remained with DPI to occupy “a central space
they cannot get anywhere else” to “work for the community” and the “privilege of
being able to make a difference”. They “value the type of work”, “good professional
networks”, with individuals indicating that they were “lucky in my diverse team”
which “made me and the team stronger”.

In terms of managing actions, managers of the sections within the DPI indicated a
variety of diverse tactics during the merger process. Some indicated that to “try to get
them to embrace change” they were proactive in their communications and “put pads
with DPI on them on their desks”, in fact they “worshiped the change process”. Others
“attempted to give clearer guidelines on priorities” to staff “to keep them in the loop” so
“staff have a good idea where they fit”. The “briefings brought people together” with
“informal bouncing of ideas, collaborative working relations” that tried to get staff
“talking across sections”, and focusing on on gaining co-operation” and “involved staff
in decision making”. Managers emphasised the need to coach staff during change,
“giving support to key roles”, “not cotton gloves” by encouraging and mentoring staff.
“Never underestimate the motivation of personal contact and walking around”. “I make
it my business to reward staff for positive behaviour”, this meant “giving them acting
and developmental opportunities”.

In terms of DPI leadership, there was “a lack of leadership”, where “our vision was
pretty ordinary”. We “need clearer management direction and vision”. The “lack of a
clear corporate plan” meant that “the rationale behind structures was unclear”. They
were “shifting from a culture of specialists and exclusion” where “people were
expanding the work”, “from a craft way, to more of a team culture, more dynamic, the
rhetoric is there”. The organisation was “in tension” between the “technical and
people”. There has been a “redesign of the management team” that indicated “a greater
emphasis on interpersonal skills” and that “effective managers and leaders are mobile
within the organisation”.

In terms of values, there was a wide range of responses around the DPI values that
covered a continuum of: “too numerous [. . .] so broad as to be meaningless”; “not much
time for them”; “reluctant acceptance”; “people do not know them, have no clue”;
“people could not name three of them”; “people only know half of them”; “good in

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principle”; “I like them”; they are “changing the culture”. They were both “another fad”
and “sound as articulated”. One manager indicated that “they hang on walls [. . .] and
slide off walls”, the difference appeared to be if someone enacted them in their local
setting.

There were considerable positive comments on the values as managers expressed
how they “believed in them” and “talked about them a lot”. They emphasised how they
hoped “my behaviour roughly matches the values”. “No one will believe the values
until they are acted out”. “There has neither been recognition nor reward to reinforce”
the values. Managers indicated the forms of exposure that helped to reinforce the
values, like “people being rewarded for speaking out” and “award certificates”.
Managers stated “I want to do team building involving the values”, “do more work on
them – don’t let them slide”, revisit, improve”. The values were shaped by the
organisational conversations, “because words ain’t good enough” if they are left on
posters.

There was a strong theme in the responses that the values were “not a mantra” but
“a reference point for relations” and needed more local emphasis so they “can be used
to discover” the emerging culture. “It was “time to move on those not exemplifying the
values” with “performance management” and “indicate errant behaviour”. “Do we
practice them?”, senior managers asked, “or do we put them out and not practice
them”? If I “don’t live the corporate values I get critiqued by senior staff”, “the values
are quoted back” to me. “The leadership group should be able to demonstrate
commitment to” the values by leading by example”.

There was often a significant pause while managers considered if “they were
valued”, providing cautious and qualified responses. Having the “confidence of my
boss” and “being supported” was critical in feeling valued. Being given the position
was primary evidence of being valued. Generally it was “being asked for opinions”,
and being “valued by staff” that was the confirmation of being valued as a manager.

In terms of how HR activity was supporting the change, most managers expressed
positive comments about “good support”, “professional and courteous”, and “hands on,
and customer focussed”. Managers indicated several positive programmes that were
supporting their endeavours to build the new culture. Leadership programmes/forums
were mentioned most by managers as they were “slowly becoming entrenched” and
letting them know their responsibilities’.

‘The regulatory change process has meant a focus on compliance”. HR activity has
in the past been seen as “the police” and “a hurdle and obstruction”, where “territorial
and controlling” actions produced many “written words [. . .] now we have enough”.
There “needs to be a shift to be less conservative in response [. . .] more looking after
the organisational interests, but progressive not regulatory”. HR has been “seen as
compliance not strategic health”, due to the changes managers “do not need a process
that contains us” and HR should “not act as regulators”. “HR has done well (during the
change process), so now it should be the managers taking responsibility [. . .] HR
should be strategic guidance”. There was unanimity that the HR role should be a
“broad strategic thrust” focussing on “key change agents”. The “previous fire dodging
stops strategic purpose [. . .] needs a commitment to strategy despite fires and
corporate direction”. Too often in the past the “HR tail has wagged the management
dog”. The “role has changed, new guidance needed, now strategic not maintenance”.
“Need HR to make it happen as part of the solution”. “There is no clear strategic
thrust”, with a need to pick the key issues “and focus on them”. HR “should use others”
and generate more “opportunities for positive expression” as the initiatives need “more

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negotiation and consultation”. A strong theme from most managers was the need for
the DPI to “socially construct” an improved platform of “people skills” or
“interpersonal skills” and “advocacy” capability.

Discussion – the move from technical to relational management
This study gathered evidence that would help in determining the strategies HR could
employ to accelerate the process of cultural change, towards the new DPI values. The
findings provide an interesting picture of a large public sector organisation grappling
with change.

The first interview phase with staff indicated they experienced a climate of
continual change and restructuring, generating organisational instability and
discontent. There was an irony within these early phases of restructuring as it
appeared that this environment had a dysfunctional effect. There was evidence of
increased silo behaviour, with people clinging to what they knew, protecting their
personal areas rather than cross collaborating within the emerging network of the DPI.

These perceptions were confirmed by the managers who cited previous poor
management of change and limited management skills created the previous drifting
culture of separate tribes who continually generated conflict over organisational
inequities that encouraged the protection of domains and specialist skills. Managers
had been selected for their technical competency rather than their relational skills.
When change arrived they often tried to shelter, as they did not have the skills to
manage their teams towards new paths.

However, the central discourse emerging from both staff and managers was how
managers utilised “agencies of change”. Those managers with the leadership
capability to develop key staff and form project teams began to change the climate in
their field of operations and contributed towards cultural change. These type one
managers provided a model for DPI leadership development, spreading change agency
within the organisation creating departments that were leader focussed. Type two
managers only used change agencies with selected staff and often segregated their
team. While type three managers failed to grasp the opportunities that change agencies
could offer to their staff and the organisation and weakly ordered their staff as
Townley (1993) suggests. In the DPI the traditional technical management was
replaced by the skills of relational leadership. The new culture focused on flexibility,
and needed managers who reflected this in their strategies and actions, developing
staff and managing workload priorities through the use of informal agencies of change.
Those leaders who exhibited the values and relational managing skills in their daily
actions were the people that accelerated the cultural development of the DPI and
dynamic resourcing.

The DPI values were used as the cultural vision for the organisation supporting the
conclusions of Sullivan (2002) and Branson (2008). The DPI values were sold as the
beacon and cultural footprint of the change process, but it is evident it was when they
were role modelled by managers they began to reshape organisational patterns and
subsequently establish changed organisational norms, as Schein and Greisis (1989)
suggest. The values began to be a point of reference and a means of measuring actions
within the organisation, highlighting inappropriate behaviour and used as a tool for
decision-making. The DPI values focused the organisation on how relationships should
be conducted and in doing so placed a large signpost that indicated that how business
was done was as important as what business was done. They mirrored the switch from
privileging the technical to the relational within the DPI. Managers were more

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conscious of leading the exploration of the values and of their own part as role models
as they used the agencies of change.

So, what does this mean for the HR department? The actions that leveraged culture
change and built dynamic resourcing capability were those that dispelled anxiety and
engaged staff. While a suite of HR programs made the change and vision more visible,
it was individual managers, especially type one managers, who were the primary
change agents as they used the informal agencies of change. But, how does the HR
department take this knowledge and use it to accelerate change? The restructuring
processes had forced the HR function to take on a regulatory stance. However, within
the emerging culture managers welcomed a greater collaborative role in consultation
and testing of HR initiatives. While the HR function had orchestrated a suite of
programmes to support the merger, this initial focus had been on supporting managers
in their staff selection processes and on supporting staff who were exiting the
organisation. This phase, during which the data were collected for this study drew to a
close as the study findings were discussed and there was then agreement that HR
actions should move to a more strategic focus. This strategic focus on more
developmental initiatives created a simple strategic thrust that all managers within the
organisation could relate to and easily vocalise, as a value-adding programme. A
bundle of HR activity emerged from the study (Dyer and Reeves, 1995). In terms of a
strategic thrust that met the manager’s needs, a primary aim would be the
development of a leadership network, to spread the use of informal agencies of change
and simultaneously develop the next generation of managers. This supports the
conclusions of Ford et al. (2008b), Pfeffer (1994), and Johnson et al. (1990) that change
begins within and is dependant on, the relational fabric of the organisation where
negotiation and involvement recruits staff and encourages change. The secondary aim
could be the development of interpersonal performance and relational staff planning
skills. Many managers indicated that local HR needs were a priority. There were many
needs that would not “fit” into a generic and corporate driven HR approach. In this case
the third strategic thrust of HR should be to engage with and support local
development initiatives. This may involve linking HR managers in a client service role
with specific DPI areas and involve workshopping the values at a local level. This
mirrors Lepak and Snell’s (1999) assertions about HR building alliances within
organisations.

Finally, in response to the research questions, the study indicated that the new DPI
values were starting to be “worked” within the organisation and that green shoots of a
new more flexible culture were visible, although only where managers were actively
using the agencies of change. The study found that the DPI values were only
embedded where type one managers were building flexible teams and developing their
staff through new projects and responsibilities. Type one managers using informal
agencies of change accounted for about one third of the section managers in the
organisation. It was HR activity that supported and developed such managers that was
critical, not the previous regulatory activity. A focus on supporting leadership growth
and local team initiatives was the most effective strategy for accelerating
organisational change. Therefore the HR strategy must be to work through their
leading managers.

Conclusion
This case study explored the role played by a Human Resources department in
orchestrating culture change during a merger of two large State departments with

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dissimilar cultures. What emerged is the need for HR to take a more strategic approach;
one that focuses on building relational leadership capability and supports local team
activity thereby accelerating change. Managing actions are the most visible change
indicators for staff, and HR should focus on growing and supporting relational
managing actions.

There are three enduring themes that emerged from this study, directly informing
the HR department within the DPI and simultaneous informing our knowledge about
how HR departments can facilitate organisational cultural change. The first was the
need to focus on a strategic approach and not use all resources and energy on selection,
grievance and out-placement activity. The emphasis should be on visibly leading the
change, not on mopping up the casualties. The second was the need to focus resources
on how managers operationalised the project, by orchestrating supportive
development activity that builds leadership capability. Such actions generated
change agency that made the change happen. Finally, the message from the managers
was that supporting disparate and diverse local developmental initiatives enabled
managers to revitalise their specific teams, and was more useful to managers during
the change process than rolling out corporate programs. Surprisingly managers
encouraged the HR department to move away from the previous public service distant
and silent role, and encouraged them to actively market their strategy and the support
they could provide. The second irony here is that the HR department had to recognise
that it too needed to change to a strategic and relational mode that focused on making
every manager in the organisation a change leader. The research also identified a
model of managing that the HR department could build on, creating more managers
who had the capability to act as change agents to build a more flexible culture.

What is also interesting in this case study is the relationship between executive
management and the HR department in terms of driving the culture change. As
always, executive management had a critical role to play in demonstrating new values
and shaping section manager behaviour through the organisation. However, this
symbolic action required considerable underpinning substantive action by the HR
department. First, there was the need through undertaking this research study to
demonstrate the need, and gain legitimacy for, a more strategic role for HR. Second, HR
has to reshape the emphasis of its programmes away from regulatory reinforcement
and exit seminars to collaborative reflection sessions that would build and distribute
the use of informal agencies of change.

It is ironic that research into organisational activity produces enduring additions to
our knowledge and understanding that often outlasts the actions of the organisations
involved. In this case, following this four-year cultural change program, a change of
government reversed the decision, and the department was once again split back into
two separate entities, reflecting the negative public sector change cycle modelled by
Andrews et al. (2008). What remains is the learning from this experience, learning that
can inform managers and planners, specifically those involved in directing strategic
HR activity.

While this study only provides a model and advice for Australian public sector
change management practices, it does provide a practical model and conceptualisation
that could be useful to managers and academics in different organisations in diverse
locations. In the end the HR focus needs to be on supporting and developing the
managers who can make change happen at the core of the organisation’s daily
interactions. Only they have the power and the relational network to operationalise the
change.

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About the authors
Dr Llandis Barratt-Pugh is a Senior Lecturer in Leadership, Change Management and
Management Development in the School of Management, Faculty of Business and Law, at Edith
Cowan University, Western Australia. His research focuses on developing understanding about
the orchestration of workplace learning. Currently he is President of the Australian Vocational
Education and Training Research Association (AVETRA).

Dr Susanne Bahn is a Research Fellow in the Sellenger Centre, School of Law and Justice,
Faculty of Business and Law, at Edith Cowan University, Western Australia. Her doctoral study
focussed on management values and safety culture. She has worked on several safety and social
research projects over the past five years and her interests lie in OH&S practice and processes,
risk management, middle management change processes, and vocational educational training in
the construction and mining industries. Susanne Bahn is the corresponding author and can be
contacted at: s.bahn@ecu.edu.au

Elsie Gakere was a Master’s student at Edith Cowan University and took up a role as an
embedded researcher within the organisation at the centre of this study. She has returned to
Africa and continued her studies, presenting a paper on knowledge management in Sub-Sahara
Africa at a recent Leadership and Management conference in Zanzibar, Tanzania.

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Week 6 Assignment Resources/The impact of leadership and change management strategy on organizational culture

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THE IMPACT OF LEADERSHIP AND CHANGE
MANAGEMENT STRATEGY ON
ORGANIZATIONAL CULTURE

Dimitrios Belias
Athanasios Koustelios

University of Thessaly, Trikala, Greece

Abstract

In this paper, we present the impact of leadership and change
management strategy on organizational culture. At first, we present the
notion of culture. There are many attempts to describe “organizational
culture”, many of which are presented in this paper. After an assessment of
organizational culture, the role of leader is pinpointed. We favor the view
that strategic leadership needs to be transformational if it is to serve the
organization. Afterwards, the notion of change is focused on. Changing a
culture is a large-scale undertaking and all of the organizational tools for
changing minds will need to be put in play. To change or to manage
corporate culture one has to be able to define and therefore pinpoint exactly
what it is one is trying to change. The evidence in this study suggests that
leadership is associated with organizational culture, primarily through the
processes of articulating a vision and to a lesser extent through the setting of
expectations. The nature of this paper is explorative and theoretical, aiming
at providing a bibliographical tool for further research. Thus, aim of this
paper is a critical bibliographical review of important terms in the field, as
well as showing the interdependencies of these terms. Finally, with that
paper, we offer managers and researchers a model on emphasizing the
importance of Management Strategy.

Keywords: Leadership, Change, Management Strategy, Organizational
Culture, Cultural Change JEL Classification:

Introduction

In our current environment of global communication, rapid change
and instant access to information can be important to an organization’s
survival. The topics of leadership and organizational culture have always
attracted interest from academics and practitioners. Much of the interest is
based on claims that both leadership and culture are linked to organizational

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performance. However, “little critical research has been done to understand
the links between the two concepts” (Ogbonna and Harris, 2000, p. 766)

To our knowledge, research regarding organization cultures in
Greece is limited. Thus, the purpose of the current study is to present a
critical bibliography in the field of leadership and Organizational Culture. In
order to do that, we had to research the effect of several factors, and
employees’ perceptions of organizational culture.

The primary objective of this study is to model the interaction
between organizational culture and change, showing the ways in which a
leader’s knowledge of organizational culture affects the process of change. A
critical examination of the literature in the fields of organizational culture
and leadership finds that the two areas have been linked to organizational
performance.

Researchers have examined the links between leadership styles and
performance and also between organizational culture and performance.
Furthermore, numerous aspects of the organizational culture literature allude
to the role of leaders in ‘creating’ particular types of culture (Schein, 1992).
Equally, the literature on leadership suggests that the ability to work within a
culture is a prerequisite to effectiveness.

Despite the linking of culture and leadership in many parts of
organization theory, little critical research has been done to understanding
the links between the two concepts and the impact that such an association
might have on managerial effectiveness. The absence of critical literature is
vast given the numerous references to the importance of the two concepts in
the functioning of organizations (Schein, 1992). Thus, the aim of this paper
is to provide empirical evidence of the links between different types of
organizational culture and managerial effectiveness.

The central objectives of this article are to illustrate the basic notions
of Management Strategy and Organizational Culture. In particular,

• We highlight terms such as “Organisational Culture”, which as
necessary to managers and entrepreneurs in order to create new
values, especially in times of economic change.

• We develop a holistic framework, which centers on the
interdependencies within leadership and organizational Culture.

• We aim at giving managers and researchers a “language” for some
terms that can create reflection and dialogue on the subject.
This paper will focus on how to achieve a functional strategy for a

business strategic change. The recommendations in the conclusion will not
be prescriptive, but will provide an opportunity for organizations to embody
what is best suited to their culture.

So, while change management depends on leadership, till today there
has been little integration of these two in literature. The important role

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leaders play in the change process has been pointed by change theorists, but
there is still no research that focuses on the relationship between leadership
and change. Thus, the aim of this article is to find some parallels between the
change literature and the leadership literature.

LITERATURE REVIEW

The literature review in this paper is presented in four stages. First,
the notion of culture and specifically organizational culture is discussed.
Second, research into leadership is examined and finally studies combining
organizational change and organizational change strategies are presented.

Culture

Culture is the sum of the beliefs that shape norms of behavior and
dictate the ways things get done in an organization. Ιt is not like a skin that
an organization can discard as it selects a new organizational culture that is
perceived to have strategic fit with its commercial strategy. Hofstede (2001)
thinks that culture is the collective programming of the mind that
distinguishes the members of one group from another. Others consider
culture as a system of shared values (Deshpande and Webster 1989).
Understanding culture can be useful in two ways. First, cultural insight
provides awareness of the extent to which organization members are willing
to accept change and a cultural assessment is likely to determine the root
cause of the problems that need stronger performance.

Culture is the sum of the beliefs that shape behavior and dictate the
ways things get done. A parallel definition of culture (Burke, 1994)
emphasizes on the meaning of events that are occurring in the workplace,
and how they influence how ways of doing things are introduced.

An organization with the best strategy in the world, but a culture that
won’t allow it to make that strategy happen is doomed from the beginning.
The importance of culture for managements lies in the fact that culture may
constrain business organization or may create opportunities and affect
marketing and product development (Blake and Laurence 1989). We must
say here that culture is ultimately held and maintained collectively by all
members of an organization and it acts as a moderating variable with respect
to the implementation of change.

Organizational Culture

There are numerous attempts to describe organizational culture.
When we speak of that term, we refer to the meanings inherent in the actions
of organizational commerce and discourse. An early description of
organizational culture was given by Silversweig and Allen (1976, p.33), as ‘a
set of expected behaviors that are generally supported within the group’.

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Some years later, it was also pointed out that organizational culture
represents the set of norms in an organization.

Furthermore, organizational culture is an important determinant of
climate. It is one of the most important elements of a successive
organization. This term entered the management literature in the late 70’s.
Later, it became “corporate culture”, a term which gained popularity from
the work of Peters and Waterman (1982). It is true that a corporate culture
can have a huge impact on an organization’s work environment. Their main
ideas suggest that functional corporate culture contributes to business
success. This is why so much research has been done to pinpoint exactly
what makes an effective corporate culture and how to change a culture that
isn’t working.

Experts in organizational behavior use the concept of culture to
describe how members of groups understand their world and their place in it.
Since Schein (1992) published the book Organizational Culture and
Leadership, more researchers have recognized culture as a multidimensional
concept. One of the most detailed definitions is presented by Schein (1992).
According to him, (1992, p.3) “Organizational culture is the pattern of basic
assumptions that a group has invented, or discovered in learning to cope with
its problems of external adaptation and internal integration, and that have
worked well enough to be considered valid and, therefore, to be taught to
new members as the correct way to perceive, think, and feel in relation to
those problems”. According to him organizational leaders are a key source of
influence on organizational culture (Schein, 1992).

Organizational culture has consistently emerged as a pivotal variable
in determining the success of efforts to implement change in an institution.
In that field, Peters and Waterman (1982) pointed out that the key features of
successful companies are mainly cultural, that is they are about values and
states of mind. These shared values by people in a group can be so persistent,
that continue to exist even when the membership of the group has changed.

Organizational culture is one of many situational moderators essential
in determining leadership effectiveness. Furthermore, this notion represents
all those elements that “glue” together the members of an organization.
Consequently, it affects the operationalization of the organization. So,
besides scholars, organizational culture has also the attention of companies
and managers.

Organizational culture is one of the most difficult dimensions of
change management and involves both formal and informal structural
components. These cultures are not uniform or static. They evolve over time
and it seems reasonable that all cultural systems will exhibit continuous
changes punctuated on occasion by more radical changes (Weick and Quinn,
1999).

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According to Mumford, Scott, Gaddis and Strange (2002),
organizational culture represents collective social construction over which
leaders have substantial control. This term is widely viewed as a source of
competitive advantage to businesses. It can be described as a group of basic
assumptions (Schein 1986), shared norms, that assists its members to cope
with problems, thus providing a smooth running of the company. How
change occurs within organizations will be influenced by the fact that
cultures are underpinned by deep assumptions that are shared (Schein, 1992).

Organizational culture focuses on the shared behavioral expectations
and normative beliefs in work units. In this respect, Amabile (1998) proposes
that, by influencing the nature of the organizational culture, leaders can
influence organizational members’ attitude to work and motivation. Then the
challenge is to select a set of actions that are feasible within the capacity of
the organization to absorb change. Arriving at a decision about the right
amount of pressure to be applied to achieve a change in culture is a balancing
act described by Amabile (1998).

Defining an organization’s culture requires being able to identify
common organizational references. For many researchers, organizational
culture is the link between corporate success and effective organization
(Peters and Waterman, 1982). Others suggest that organizational culture is a
multivariate phenomenon and the various factors which comprise the
concept must be identified (Beyer and Trice 1987).

Organizational change typically originates from two primary sources
including change resulting from external or internal environmental factors
that are outside the leader’s control and change resulting from a planned
implementation. In order for an organization to be successful both external
and internal environment should be considered. Gregory (1983) supported
this view and proposed that when the external environment is subject to
frequent change, a strongly homogeneous culture may make it difficult for
the organization to adapt. Thus, strategies suggested by Ott (1989) are
appropriate.

Organizational culture is an important internal environmental aspect
that can lead an organization either to success or failure. Evidence has shown
that it expresses the internal environment of an organization and reflects the
extent of agreement between managers and employees assumptions (Aycan,
Kanungo and Sinha, 1999). Furthermore, analysis of the organizational
culture helps identify the structure of the organization and the beliefs of the
employees, which are essential elements in the implementation of leadership.

Finally, Belias and Koustelios (2013) studied the organizational
culture of Greek banking institutions. They showed that the dominant
organizational culture of the institutions were hierarchical while employees
preferred the clan type.

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Assessment of Organizational Culture
Evidence showed that the assessment of the organizational culture

may help assisting the establishment of the changes, either structural or
technological (Cabrera, Cabrera and Barajas, 2001). In 21st century, as more
and more universities enter into new arrangements, the need to assess
organizational cultures becomes crucial. This term has proved difficult to
define, but several of its important components are agreed on by most
researchers. These include the norms, assumptions and beliefs shared by
organizational members, as mentioned earlier. Due to the abstract nature of
these elements, there is a challenge for external researchers who want to
assess organizational culture. It is even difficult for members of an
organization to describe their own culture.

What’s more, top managers can detect mismatches between the
present organizational culture and the culture they desire to establish. Thus,
the assessment may help them to better design a potential change either in
the culture of the institution or in an administrative manner (Cabrera et al.,
2001).

Finally, the assessment of organizational culture is significant since it
affects employees job satisfaction (Koustelios 1991), job performance and
organizational change. Furthermore, organization culture was found to be
strongly associated with organizational leadership corporate performance,
knowledge acquisition and organizational learning (Liao, Chang, Hu, Yueh,
2012).

Typology of Organizational Culture

There are many attempts to classify organizations according to their
type of organizational culture. The difficulty in identifying a typology of
organizational cultures is acknowledged, since it’s difficult to categorize
beliefs of individuals.

According to Hofstede (1991), the behavior of an individual in the
work place is influenced by three cultures: national, occupational and
organizational. The first one involves the values that have been given by the
family. The second is formed during school and professional life. While
national culture is difficult to change during lifetime, the other two cultures
may change.

The most notable efforts in that field were made by Cameron and
Quinn(2006). They found that many studies of organizational cultures share
many common characteristics and so there is a considerable overlap in
studies. Cameron and Quinn(2006, p.105) also mentioned that “it is possible
to identify a desired culture and to specify strategies and activities designed
to produce change, but without the change process becoming personalized,
without individuals being willing to engage in new behaviors, without an

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alteration in the managerial competencies demonstrated in the organization,
the organization’s fundamental culture will not change”.

Leadership

Change models of leadership have gained the interest of managers
and scholars because of their promise of extraordinary organizational
outcomes. In that field, much is written about leadership qualities and types
of leadership (Bass and Avolio, 1994). For example, Bass (1985) states that
leaders must promote change by creating vision. Generally, leaders must
possess a clear understanding of the strategic objectives for their
organization, identify the actions needed to reach those objectives and
conduct an analysis of the organizations existing ideologies.

Strategic leadership needs to be transformational if it is aimed to
serve the organization. In many instances, the type of leadership required to
change culture is transformational, because culture change needs much
energy and commitment to achieve outcomes. Theories of transformational
leadership emphasize that change is accomplished through the leader’s
implementation of a unique vision of the organization through powerful
personal characteristics designed to change internal organizational cultural
norms (Hatch, 1993). What’s more, transformational leaders must operate
from a foundation of high morality and ethical practices and have a
fundamental understanding of the complex factors that make collective effort
possible in an organization.

Leadership and organizational culture are widely believed to be
linked in the process of change (Schein, 1986). A corporate leader who
encourages continuous learning and favors change helps to define an
organizational culture that is flexible. Rather than fearing condemnation for
suggesting different directions, employees in this kind of environment will
feel free to express their innovative opinions, leading to higher productivity.

Strategic leaders have the best perspective where knowledge is
concerned to see the dynamics of the culture, what should remain and what
needs alteration. According to Kouzes and Posner (1987, p. 30) when facing
significant change, “Leadership is the art of mobilizing others to want to
struggle for shared aspirations”. Leaders therefore must be skilled in change
management processes if they want to act successfully as agents of change.

Leaders are recognized as exerting a dominant influence on the
direction of cultural norms and basic assumptions in institutional settings.
Van Knippenberg and Hogg (2003) argue that in high salience groups,
leadership effectiveness is intensely influenced by how prototypical the
leader of the group is perceived to be by his employees. The social identity
perspective may be important when examining leadership and power, but it
is by no means the only perspective.

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An understanding of culture and how to transform it, is a crucial skill
for leaders trying to achieve strategic outcomes in the management of an
institution. The role of the leader in adapting culture was discussed by Ott
(1989), who claimed that this may be done through a number of processes
including staff selection, socialization, removal of deviating members and
communication mechanisms. Furthermore, the competing values framework
points out the contradiction and dynamics of the organization. It also implies
that people at the managerial level must be able to perform dynamic
behaviors.

The main task of management today is the leadership of firm change.
Good strategic change leadership involves instrumental roles and big
interpersonal skills. Good change leaders find out the important dimensions
of change leadership. Being able to balance the roles depends mainly on
whether a leader has certain qualities needed for good change leadership.
Finally, strong skills support these key change leadership qualities.

Leadership’s problems

An adaptive work environment requires the adaptive leader to control
direction, protection, conflict and norms within the organization’s systems.
The three required elements of leadership are ability to influence, a common
goal and employees that are willing to work toward the vision. However,
even having all three elements in place, there is no guarantee that effective
leadership can be practiced. Leaders often encounter resistance to their
efforts to redirect an organization. Davy et al. (1988, p. 58) suggest that “the
only certain thing about organizational and change is that nothing is certain’.
Furthermore, they estimate that ’employee problems’ are responsible for
between a third and half of all merger failures.

To operate co-creatively, leaders and people need to put their first
priority on the needs of the customer and to align as an enterprise team that
works collaboratively across internal boundaries in service to that customer.
Nadler, Thies and Nadler (2001) think that too many leaders make the
mistake of thinking that they can change individual behavior in an
organization by changing its culture. They suggest that for effective cultural
change to occur there is the need for the active engagement of the CEO and
executive team. Top leaders must assume the role of chief architect of the
change process.

As mentioned before, change resides at the heart of leadership.
Indeed, nearly two decades ago, Bass (1994) defined leaders as agents of
change, whose acts affect other people more than other people’s acts affect
them. In that field, Valikangas and Okumura (1997) advocate that one of the
strongest motivations and sources of power for leadership is internalization,
meaning the acceptance of leadership influence that is congruent with the

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behavioral motives of followers. Change that is executed by coercive power
or for calculated gain in certain roles is not likely to be followed. They
believe that the fact that individuals resist change is partly as a result of the
leader’s failure to grasp what motivates followers to change their behavior.

Leaders’ actions, words and behaviors have to resonate within
national culture, organizational culture and the individual employee’s
background and beliefs. One of the most common difficulties stems from
what might be called ‘cultural differences’. These differences, particularly at
the top management level, are most likely to influence how the change is
managed. Pondy and Huff (1988) claim that the implementation of any
change process often has problems because it is improperly framed by top
management. The human factors involved should guide any change process.
They argue that framing strategies affect cognitive acceptance of
organizational change.

Finally, it seems that how the leader intervenes depends on how he
thinks the system works (Malby, 2006). Some amount of time pressure and
possibly competition appears to be facilitative. On the other hand, too much
pressure appears to lead to wrong solutions. Thus, an organization’s
important values and strategic objectives will impact on individuals’
perceptions of their environment (Michela, Lukaszwski and Allegrante,
1995).

Why Change

There are different factors as time, scope and others that should be
considered before making the change. It is crucial for company managers to
understand and change the organization effectively. For example,
understanding the right time for change is an important issue. In the time of
crises the organizations react faster than the time of longer strategic
developments that may happen from time to time.

Scope is a second important section. In this section managers have to
consider the degree of change that they want to apply within their company.
It’s also important to clarify that resources available for the change which
consist of cash, time (Pettigrew, 1987)and number of people involved, are
important. These are the facts that should be considered before changes are
made.
Of course, after that managers have to design the solution for their
problem. Change path is necessary for the organization and extend and speed
of change are two important factors that shall be given attention. Change
start point will refer to where and when the change should be developed.
Change style is the style of implementation chosen by manager and there is
no fix formula for that. It could be top down approach or the opposite.
Technical, political and cultural interventions are the mechanism to be

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deployed. Finally, the team, the leader and even consulting should be clear
before the change.

Cultural Change

Changing a culture is a large-scale undertaking and eventually all of
the organizational tools for changing minds will need to be put in play. To
change or to manage corporate culture one has to be able to define and
therefore pinpoint exactly what it is one is trying to change. In the area of
organizational change management the attention of academic researchers and
practicing managers has been focused on three principal questions: what
changes, why changes, and when changes(Pettigrew, 1987). Finally, all
significant organizational transformations require some level of corporate
culture change.

As mentioned before, cultural change is concerned with beliefs,
traditions and human behavior within the organizational structure. It is well
Known that As Michela and Burke (2000) claim, to change culture, we must
first understand it. Goffee and Jones (2001) propose that cultural change may
often happen as subtle shifts within elements that characterize a particular
culture.

It is also important to understand cultural change as involving
strategic change. Sathe and Davidson (2000) suggest that culture change
consists of changing people’s minds as well as their behavior. The manner in
which the culture change for each individual is evoked also has an important
impact on the result and the consequences for each individual.

So far, it has been obvious that cultural change by its very nature is
rather nebulous. Hatch’s (2000) model of organizational culture change
emphasizes the roles of both leaders and followers in creating and changing
organizational culture. In general, these changes are moving away from
traditional control, where leaders set rigid requirements, lead through fear.

The problem associated with culture and cultural change is the fact
that everything is cultural. Cultural change was also discussed by Weber
(1978), who attributed it to charismatic interventions of a unique and
idiosyncratic sort. Furthermore, Weber thinks that a top executive’s role as
the main source of information is conferred by their important role in
shaping culture.

Finally, any management team involved in cultural change efforts
requires an understanding of what the new cultural assumptions and
behaviors of both management and staff should be to support the successful
implementation of an organizational strategy. Fishman and Kavanaugh
(1989) suggest that the culture of an organization and how people respond to
change is influenced substantially by the behaviors of the leader. Thus,
implementing cultural changes is not simple: it involves re-moulding

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behavior and it’s a major change management challenge, taking a great deal
of time and hard work from everyone involved.

Organizational Change

Change is an inevitable part of existence for individuals and
organizations and is a factor faced by leaders in the workplace when dealing
with adaption to a dynamic business environment. According to Terry, Carey
and Callan, (2001) it is true that an organizational change may create job
insecurity to individual self-esteem. Thus, the adaptive leader’s first step in
dealing with change centers on understanding its affect on individuals.
Buono, Bowditch and Lewis (1985) claim that the subjective impressions of
the individuals involved should be the primary focus in studies of
organizational culture and of the changes that occur in business.
As mentioned earlier, change is extremely dynamic and
consequently, the change management process must also be adaptive.
Cartwright and Cooper (1996) claim that the degree of constraint placed on
individuals when a change from one culture type to another is in progress,
will depend on the cultures being merged. They relate this to the four culture
types (power, role, task/achievement and person/support) proposed by
Harrison (1972) and propose that merging some of these forms of culture is
likely to help an easier transition than the blending of others. Finally, the
direction of the change in culture will affect the level of constraint placed on
individuals.
Changing an organization’s culture is one of the most difficult
leadership challenges. That’s because an organization’s culture comprises an
interlocking set of goals, processes, communications practices and
assumptions. In that field, Cartwright and Cooper (1996) claim that during
times of organizational change, such as rapid growth or a merger, most
organizations will move to more strict control by imposing a greater level of
constraint and reducing the freedom individuals have to make decisions.
They further suggest that it is important that employees at all levels become
involved in the change. In that domain, they proposed a continuum to show
the relationship between cultural types and the effect on the levels of
autonomy that each culture type placed on individuals.
Galbraith (1977) adds to this model by proposing that, for an
individual, there are two basic types of motivation, extrinsic and intrinsic,
that can be provided by leaders. Selecting the right one is important,
especially in times of extensive change such as a merger. Extrinsic
motivation results when individual behavior is a result of factors external to
the individual such as power exercised by leaders to bring about pressure to
perform. This form of motivation results in individuals feeling compelled to
engage in behavior for an outside source. On the other hand, intrinsic

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motivation is associated with active engagement in tasks because people find
them interesting and is associated with an individual’s need for competence
and autonomy. As such, this kind of motivation is associated with some
degree of self management and a sense of satisfaction associated with
performing the task.
Finally, there are different kinds of changes that companies will face
during their life time. Sometimes there are internal problems occurring that
needs to be solved or external. The conclusion reached here is that
organizational changes are initiated due to either internal or external causes.
So, two types of organizational change have been differentiated according to
the criterion of cause: organizational development and adaptation (Porras
and Robertson, 1987)

Organizational change strategies

Strategic change is a way of changing the objectives of the company
in order to obtain greater success. There is no certain magic formula to do
the job and of course it is not always leading to success. The practice of
strategy execution has been thoroughly researched and documented in the
past decades by academics. Consequently, there is no shortage of suggested
approaches and principles for achieving successful strategy execution. When
classifying organizational change strategies almost all authors start with
Chin and Benne (1969), who recognized three basic ways to implement
change: rational empirical, power coercive and normative re-educative. This
classification has been supplemented many times.

Finally, a useful strategy must consider (Crawford, 2013):
• the organizations current capabilities
• the organizations’ competencies and
• the agreed change management model for the needed change of the

organization

Employees

Helping employees through change is not an easy task. It requires
formal programs that must be introduced gradually and managed with care.
When cultural change happens, employees become aware that the measuring
tools for performance and loyalty change suddenly. This threat to old
organizational lifestyles leaves members in a state of defensiveness
accentuated by low levels of trust within the institution and cultural shock.

Individual resistance to change is one of the primary reasons that
change initiatives fail at all levels. Mirvis (1985) claims further that
employee reactions pass through four stages: (1) disbelief and denial, (2)
anger and resentment, (3) emotional bargaining beginning in anger and
ending in depression, and (4) acceptance. Unless these different stages are

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recognized and dealt with, employees will resent change, will have difficulty
reaching the acceptance stage, and the risk of failure is increased
significantly.

Furthermore, an individual’s reaction to change will be influenced by
situational appraisals that will reflect the individual’s cognitive evaluation
regarding how a situation will affect his or her level of wellbeing (Lazarus
and Folkman, 1984). An individual’s emotional or affective experience
during a change process impacts their commitment to facilitating a
successful organizational change and their behavioral contributions to the
change effort (Huy, 2002). More specifically, individuals’ positive affective
reactions to change positively influence commitment to change (Herscovitch
and Meyer, 2002). On the other hand, individuals’ negative affective
reactions to change positively influence behavioral resistance to change.

Social identity theorists (Haslam and Platow, 2001) would argue that
a shift from the personal towards the relational level of identity is appropriate
in an analysis of leadership in organizational contexts. That theory focuses
on the notion of the self concept that comes from memberships in social
groups and contrasts with personal identity.

Finally, the influence of leaders rests on how others regard them.
According to Weber (1978), leaders in this sense are lent prestige when
employees believe in them, and are willing to accept their decisions. Conger
and Kanungo (1988) point that leaders need to understand that management
refers to processes of controlling, while leadership is the process of
motivating people to change.

Organizational Crisis (merger)

It’s hard to argue with the idea that company leaders play a vital role
in successful mergers and acquisitions. In times of organizational crises like
a merger, most organizations will tighten control to effect change and place a
greater degree of constraint on the individuals.

Mergers and acquisitions almost always involve some level of
transformational change and disruption. Covin, Sightler, Kolenko and Tudor
(1997) claim that individuals of an acquired firm will feel the impact of a
merger more strongly with associated specific behavioral outcomes. For
example, individuals from an acquired firm in a merger may suffer from
feelings of worthlessness and may feel inferior because of loss of autonomy.

Success in aligning strategy, leadership and organizational culture
can lead to profitable growth after a merger or acquisition. In that field,
programs are presented as departures from an organization’s past fail because
the cognitive structures of members constrain their understanding of the new
initiatives.

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Our thesis
From the bibliographical research done above, we can conclude that

leadership impacts more on organizational culture than culture influences
strategies. So, the most fruitful success strategy is to begin with leadership
tools, including a vision of the future, cement the change in place with
management tools, such as role definitions and control systems and use the
pure power tools of punishments as a last resort, when all else fails. What’s
more, the most profound strategy for shifting an organizational culture is
offering multi-day leadership retreats cascaded through the organization.
These retreats blend organization performance with a focus on personal
growth and relationship skills.

To sum up, strategic change brings so many challenges. These
include time required to develop, implementation of the plan as well as
assign people to come with strategies. There are different methods that can
assist organizations in solving these challenges, which need great support
and involvement of senior management to be successful. Besides that, there
is a need of design team to define the basics of the change. Finally, strategic
changes sometimes comes to be vital for the organizations, but beside the
implementation of the change, time and people in the organization are very
important.

Furthermore, our point of view is that that companies make efforts to
innovate their processes in order to achieve growth and to improve profit
margins. Thus, implementing Organizational Change is one of the most
crucial, but least understood skills of leaders nowadays. After the literature
review, we feel that some of the negative responses to changes are caused by
leaders’ not understanding the importance of communicating a change
message.

More generally, we have drown several significant theoretical and
practical implications from this paper. The most important is the usefulness
of further research into relations between organizational culture and
organizational change strategies. In this article, a theoretical view of the
relationships among transformational leadership, organizational culture and
climate for organizational innovation was developed. This paper has also
shown that there is a theoretical basis for the assumption that organizational
culture is one of the factors in selection of organizational change
management strategies. Of course, it is necessary to empirically test this
assumption by testing the hypotheses generated in this paper.

Overall, the linkages found in this study among specific leadership
behaviors, organizational culture suggest that it may be possible to develop
more theories about proximal determinants of organizational cultures dealing
with change. This paper also implies the need to expand research to other
aspects of organizational change. It is necessary to explore whether

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organizational culture impacts the character of the change process and to
what extent. It is also necessary to identify if and how the culture impacts the
efficiency of the change process and its success.

From this paper an assumption also emerges that there may be a
feedback effect of organizational change strategy on organizational culture.
The question is ‘can the application of a certain organizational change
strategy imply changes of organizational culture and if so, how’? Finally, the
paper has pointed out the need to explore the impact of organizational culture
on other elements of organization and management, such as leadership style,
motivation, and reward system.

Practically, we can recommend this paper to company management
which is planning organizational changes, to help with choosing the
management strategy for change that is compatible with the culture of their
organization. This will contribute to the success of the change process. In
order for this to be possible they must have a good knowledge of the culture
of the organization as well as of the available organizational change
strategies.

Conclusion

As mentioned before, the evidence in this study suggests that
leadership is associated with organizational culture, primarily through the
processes of articulating a vision, and to a lesser extent through the setting of
high performance expectations and providing individual support to workers
Thus, generally speaking, the key to choose the right approach to culture
change is to Know how organizations function. As social systems
comprising work, people, formal and informal systems, organizations are
resistant to change and designed to neutralize the impact of attempts at
change. Although culture change is necessary in creating and reinforcing
organizational transformation, our position is that making necessary
structural changes may serve as the initial intervention for shifting culture.

Also, the findings of this study are consistent with research that
indicates that vision is a major facet of leadership and is associated with
organizational culture (Bass and Avolio, 1994). Generally, leaders play a
critical role in selecting and planning appropriate change management
approaches. In summary, it is important that the leaders of the organization
create an atmosphere of psychological safety for all individuals to engage in
the new behaviors and test the waters of the new culture. Employees need to
be involved in order to verify for themselves the validity of the new beliefs,
examine consequences for themselves as an individual and, explore how they
can contribute to the change effort (Zammuto, Gifford and Goodman, 2000).
Therefore, the underlying causes of employee resistance need to be studied
carefully and understood fully if improved outcomes are to result.

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Closing this paper, we must admit that it has significant limitations.
The first is in the nature of this paper, which is explorative and theoretical.
The paper has resulted in hypotheses regarding the relations between
organizational culture and strategy which are yet to be empirically proven.
Without empirical testing the findings of this paper are not entirely valid.
Also, the paper is limited to investigating organizational culture impact on
just one aspect of organizational change management – change management
strategy. It does not examine the impact of culture on other aspects of
organizational change that would complete the picture.

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Week 6 Assignment Resources/What lies beneath – The role of informal and hidden networks in the management of crises.

Financial Accountability & Management, 30(3), August 2014, 0267-4424

What Lies Beneath? The Role
of Informal and Hidden Networks

in the Management of Crises

DENIS FISCHBACHER-SMITH AND MOIRA FISCHBACHER-SMITH∗

Abstract: Crisis management research traditionally focuses on the role of formal
communication networks in the escalation and management of organisational crises.
Here, we consider instead informal and unobservable networks. The paper explores
how hidden informal exchanges can impact upon organisational decision-making
and performance, particularly around inter-agency working, as knowledge distributed
across organisations and shared between organisations is often shared through informal
means and not captured effectively through the formal decision-making processes.
Early warnings and weak signals about potential risks and crises are therefore often
missed. We consider the implications of these dynamics in terms of crisis avoidance
and crisis management.

Keywords: risk, crisis, informal networks, control, organisational performance

INTRODUCTION

A striking characteristic of organizational life is that there is a lot of talk about
decisions, decisions that have been made, are to be made, will be made, should be
made, will never be made; talk about who makes decisions, when, how, why and with
what results. Organization members interpret a significant part of activities around
them in terms of decisions (Laroche, 1995, p. 67).

The processes of decision-making are central to accountability and control within
organisations. It is well known, however, that organisations tend to manage
what they can measure and that behaviours and reporting alter accordingly,

∗The first author is research Professor of Risk and Resilience in the Adam Smith Business
School at the University of Glasgow. The second author is Dean of Learning and Teaching
in the College of Social Sciences and Senior Lecturer in the Adam Smith Business School
at the University of Glasgow. This paper is based on research funded by the EPSRC (Grant
EP/G004889/1) and by the Glasgow Centre for Population Health.

Address for corresspondence: Denis Fischbacher-Smith, University of Glasgow Business
School, Gilbert Scott Building, Glasgow G12 8QQ.
e-mail: denis.fischbacher-smith@glasgow.ac.uk

260 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

often to the neglect of important but un-measurable information and activity
(Seidl, 2007; and Smith, 2005a). The focus on measurement encourages decision-
making that attends primarily to those activities that are known, visible and that
can be made explicit. Decision making in relation to risk and risk assessment
in particular, has become increasingly prominent in organisations due in part
to the reputational damage that can ensue following a crisis and from which
organisations have great difficulty recovering (Sipika and Smith, 1993; and
Smith and Irwin, 2006). Such assessment relies primarily on calculations of
probabilities and the consequences of particular hazards, and this process
becomes contextualised within information sharing about organisational risks.
This process often relies on experts and senior staff within the organisation
to calculate the nature of the risk. These groups draw mainly on hard data or
information that is known within the organisation around failure modes and
their effects. This information is then shared amongst decision makers. There
are, however, several problems with this approach.

Firstly, the process is more effective when the probabilities of failure are
known and the consequences are well understood. The approach has problems
when it is applied to low probability, high consequence events where the
frequency of occurrence is so low or the process is so new that there is uncertainty
around the statistical judgements of occurrence (Fischbacher-Smith, 2010).
Secondly, there are potential issues around the role that technical expertise
can play in the process as powerful interests can serve to distort the assessment
of risk under certain conditions (Collingridge, 1992; Collingridge and Reeve,
1986; and Smith, 1990). Thirdly, even where information is available about a
particular hazard, the decision-making process can also be shaped by judgement
of that risk which is based on informal or more qualitative information. We argue
here, that despite the use of such information and expertise, the distribution of
knowledge across and between organisations presents significant challenges to
organisations in the context of decision-making and risk management because
many of the early warnings of crises are shared through informal networks
that are both unobserved and potentially unobservable. It is for this reason
that organisations often only discover that many of these indications existed
about the potential for a crisis after the event. These warnings were either
undiscovered until after the event or had been discovered in advance but
were not fully understood or prioritised because they did not fit with the
decision making paradigm of the organisation (Fischbacher-Smith, 2012). As
many of these early warnings exist within intra- and inter-organisational
networks, the challenge for management is that of identifying and managing
this otherwise hidden information amongst often unobserved and unobservable
networks and it is the nature of this challenge that forms the core of the
paper.

How information and knowledge informs the decisions that managers make,
is something which has been the subject of considerable research interest
(Argyris, 1990; Boisot, 1995; Collingridge, 1992; Collingridge and Reeve, 1986;

INFORMAL AND HIDDEN NETWORKS 261

and Seidl, 2007). Of importance within this literature has been the role of
socio-technical networks in shaping the supply of information, verifying and
challenging assumptions around decision parameters, and in identifying early
warnings of the potential failures associated with particular decisions (Ballinger,
et al., 2011; Cross et al., 2006; and Jansen et al., 2011). In many respects,
socio-technical networks are a central dynamic of organisational performance,
particularly in the context of human services such as healthcare (Doolin, 1999).
Here, an organisation’s dynamic capabilities (Augier and Teece, 2008; and
Barreto, 2010) are a function of the individuals and teams that interact together
to deal with the demands of the ‘problem space’ (Boisot, 1995; and Boisot
and Child, 1999) as well as the ways in which the organisation communicates
information, structures its knowledge management processes, and develops its
staff. The nature of the information and data that is provided, and the processes
through which it is analysed and stored, are important elements in shaping how
effectively organisations manage this information space and make decisions in
the process.

The recent Europe-wide crisis around the contamination of processed foods
illustrates the nature of the problem well. In January 2013, beef products in
the UK and Ireland, were found to contain significant proportions of horsemeat
(Castle and Dalby, 2013; Meikl et al., 2013; Meikle and McDonald, 2013; and
Williams, 2013). This horsemeat had made its way into food supplied in hospitals
and schools, despite public sector procurement regulations and quality control
processes. The subsequent testing by government agencies revealed this to be
an endemic problem within the European Union (Leake et al., 2013; Linchfield
et al., 2013; and Meikle et al., 2013) and highlighted the difficulties associated
with auditing information surrounding the international production and transfer
of food products. What became evident from the early stages of this crisis was
that financial drivers were a key factor in shaping behaviours in a globalised
supply chain. The crisis also illustrated the problems associated with a weak
regulatory framework (or at least one that was weakly enforced) and a range
of issues around auditing compliance. The horsemeat crisis was not the only
event to illustrate problems around regulation and compliance. The death of
patients at mid-Staffordshire hospital (in the UK) (Francis, 2010), the so-called
‘horsemeat scandal’ (Castle and Dalby, 2013; Leake et al., 2013; and Thomson,
2013), and the presence of non-clinical grade silicone in breast implants (Berry
and Stanek, 2012; and Freshwater, 2012) also highlighted the problems around
accountability and control against a backdrop of economic pressures.

In human services, such as health care, where organisations are heav-
ily dependent on their human capital to achieve effectiveness, knowledge,
information, data and decision making can be seen as being largely co-
produced with other organisations involved such as social care, education,
and third sector agencies providing social support (Osborne, 2006 and 2009).
As such, the quality of the human, relationships between service providers
(which are often informal), and between these providers and their consumers

262 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

(or patients) also significantly influences the nature of organisational perfor-
mance and effectiveness. Much of the literature on service provision emphasises
these interactions in terms of improving service integration, strengthening
inter-agency cooperation, and clarifying protocols between agencies so as to
reduce gaps in service provision. Some stimulus for this has arisen out of cases
concerning child protection and older people’s services, especially those where
the system was deemed to have failed a vulnerable child or older person. Such
services have often provided a focus on the difficulties associated with this
network of co-production especially in relation to communicating problems or
near misses, or following up on concerns as early warnings. Both children’s and
older people’s services are particularly good examples because protection and
care depends almost entirely on effective inter-agency (health and social-care)
working. Information flows and knowledge management are thus often identified
as processes where failures can occur around early warnings and near-miss events
(Rasmussen, 1982 and 1983; Reason, 1990 and 1997; and Turner, 1976 and 1978).
Within this literature, however, little attention has been given to the substantial
limitations organisations have in controlling informal information sharing and
decision making between networked organisations and thus the vulnerabilities
networks can create.

Our aim here, therefore, is to consider how networked service organisations
rely on informal human interaction as an essential conduit of information and
knowledge exchange, and to illustrate how these interactions often remain
unobservable and uncontrollable by managers, thus having significant potential
to directly cause and/or escalate crises. Drawing on both inter-organisational
theory and the extensive body of work in crisis management, we examine
how vulnerability may be created and early warnings ignored and we consider
the implications of informal networks for managerial intervention, contingency
planning, and managerial control. Before exploring these processes further, we
first need to outline some of the key factors around the management of risk and
the limitations of control.

RISK, CONTROL AND UNOBSERVABILITY

Risk is typically understood in terms of estimating both the likelihood and the
consequences of a particular event occurring (see for example, Royal Society,
1983 and 1992). Risk management is concerned with the processes of identifying
areas of potential hazard, reducing the probability of their occurrence and
mitigating the remaining potential vulnerability that exists in relation to that
risk. Residual risks are ideally removed, or if that is not possible, then the
potential losses are insured. In terms of contingency planning for risk, well-
prepared organisations will develop policies to deal with a range of hazards from
‘natural’, through technological accidents, to malicious or erroneous damage
caused by the actions of employees or external agents. Such policies invariably
seek to ensure a coordinated, efficient and effective response to situations that

INFORMAL AND HIDDEN NETWORKS 263

arise, and staff will be trained (to some extent) to respond to such situations
(Smith, 2000 and 2004).

An important consideration within the risk management process is how the
activities and information flows that occur within the organisation are controlled
through the (risk) management function and the limitations associated with that
process. Figure 1 shows the relationship between three employees: a manager
(designated as ‘M’) and two members of staff (‘A’ and ‘B’). A great deal of
management theory and practice tends to assume that sufficient information
will be captured through formal processes, and that early warning signals about
potential problems will also be captured in this way (Brookfield and Smith, 2007).
As such, this conforms what Seidl terms the ‘structures of observation’ – which
leads to those elements of organisational performance that are observed (the
zone of observability) and those that are effectively ignored (the zone of non-
observability) (Merton, 1957; and Seidl, 2007). These ‘structures of observation’
involve two considerations: the first concerns how such structures can shape
observations and the second concerns how these observations relate to each other
across time and place (Seidl, 2007). Knowledge also provides the mechanism by
which certain observations are excluded and Seidl argues that:

knowledge is a selection of certain (generalized) distinctions for observation from all
possible ones. Thus, the reverse side of knowledge is an exclusion of distinctions for
observation; an exclusion of possibilities of observation (Seidl, 2007, p. 20).

Figure 1

Elements of Organisations

264 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

Management will invariably seek to shape the nature of observations and the
processes around knowledge creation and transfer. Invariably, this is seen
as taking place through formal managerial processes and the bureaucratic
functions of the organisation, rather than through any informal processes. In
reality, however, a considerable amount of information is exchanged informally
between employees and may bypass formal management mechanisms/functions.

The logical extension of this argument is that at any point in time, managers
will have incomplete information around discussions pertinent to risk and, more
importantly, may fail to identify information that would point to early warnings
of impending failure. In some respects, these early warnings may be missed as
a result of what Seidl (2007) terms non-knowledge and the exclusion of certain
forms of observation. Similarly, the leakage of information and knowledge
outside of the organisation can bypass existing control mechanisms and be used
to generate harm for the organisation through direct and malicious actions by
outsiders. The insider threats are increasingly seen as important due to the
threats from espionage (both commercial and state), terrorism, and organised
crime. Inevitably, such processes are also (or aspire to be) invisible to detection
and therefore also to management. When one considers that there is a normal
degree of misbehaviour within organisations such as bending rules, cutting
corners, bypassing ‘unnecessary’ bureaucracy (see Ackroyd and Thompson,
1999), then it requires little imagination to see how intentional harm may be
caused by those with malicious intent seeking to exploit weaknesses.

Although managers are likely to want to create structures where they
themselves become the key connector between individuals, in reality, situations
are more complex for various reasons. Firstly, and particularly in healthcare,
multidisciplinary teams, integrated services and managed clinical networks for
example, all require team-wide formal communications and the ability of team
members, who may not all be employed by one organisation, to take devolved
decisions along the lines of their professional training, autonomy and judgement.
It may be, for example, that a social worker and community psychiatric nurse
(employed by the NHS and Council/Local Authority respectively) need to
undertake a joint visit to a patient in the patient’s own home. Their decision
making will be influenced by their training, the particular circumstances, the
health and wellbeing of the patient, any informal ‘modus operandi’ that the two
individuals have reached after working together over time, any relationship of
trust, and prior knowledge of the patient or locality. Such dimensions do not
fall within the structures of observation to any great extent despite the role
of formal inter-agency protocols and the extensive documentation of visits and
assessments.

Their manager(s) will be geographically and temporally remote from that
decision so will have limited control over the nature of their interaction, little
opportunity to identify the existence of an informal relationship between them
and therefore, limited opportunity to capture the information shared. In the
majority of cases, this will not give rise to a crisis and whilst it may render the

INFORMAL AND HIDDEN NETWORKS 265

manager a less socialised perspective of their own area of responsibility, day to
day service may be provided to a high level and patient needs met. However,
there are sadly cases where difficulties arise and crises do emerge. One need
only read the newspapers to hear frequently of cases where a patient has injured
someone, where the patient was known to health and care services and where,
‘poor communication’ is deemed to have allowed the situation to occur and
indeed to escalate to the point that it has. The issue then is how, and indeed
if, it is possible for a manager to ever be able to capture or ensure that key
knowledge in a situation like that is communicated and acted on appropriately.

When multiplied to consider the exponential number of informal relationships
within and between organisations in which risk-related issues might be
communicated, the challenge to organisations and their managers dealing with
risk grows significantly. Figure 2 captures the formal risk analysis processes
between teams (within or between organisations). It also identifies the informal
communications (dotted lines between A and B) and the way in which they feed
into wider sets of informal network communications they engage in.

The challenge for organisations is that where multiple departments or
organisations are linked together, the focus is normally on formal risk analysis
processes which will, in turn, be based on the structures of observation that are
in place within the organisation(s) involved in delivering a service or responding
to a crisis where it occurs. The structures of observation will help to shape
perceptions of the range of anticipated events and any worst-case scenario. The

Figure 2

Knowledge Transfers Around Early Warnings

266 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

outer interactions within Figure 2 are largely of an informal nature and may
capture information that is present within the zone of non-observability. As the
informal networks extend beyond the span of formal controls, early warnings
(often fairly weak signals) are not likely to be identified in an effective manner.

Many of the information flows and communication processes that take place
within organisations occur informally. Colleagues share with their peer groups
the shortcomings of processes, the inadequacy of information, the limitations
of data, the distortions within management information systems, and yet often,
managers themselves are unwilling to acknowledge such shortcomings and so
do not recognise the potential for failure. Interactions between individuals ‘A’
and ‘B’ are typically interpreted by managers through the lenses of formal
organisational structures and formal reporting mechanisms, to the neglect of
the informal, yet, as the dotted lines in Figure 1 denote, it is likely that there will
be multiple informal communications between ‘A’ and ‘B’, and these potentially
transcend formal boundaries as discussed above. Bureaucratic processes will
therefore inevitably fail to capture the detail of early warnings and will often
prove to be too slow to react when these warnings are captured. They may also be
unable to contain the flow of sensitive information outside of the organisation.
Overly-bureaucratic environments may also cause individuals to violate (in order
to get the job done), thereby moving the organisation closer to the potential for
failure whilst allowing managers to believe that their perceived higher levels of
controls will guarantee increased safety (Ackroyd and Thompson, 1999; Reason,
1990 and1997; Weick, 2001; and Weick and Sutcliffe, 2001).

This process is shown in simplified manner in Figure 2, where a set of
interactions take place that lie outside of the normal sphere of managerial
control and which generate a perception of order in a situation where the
reality is disorder. It is within these informal relations that a great deal may
be discussed about the organisation, about the range of tasks and activities
undertaken (e.g., discussion of management’s approach to a particular project)
and that will thereby generate considerable potential for sharing essential
knowledge about hazard and risk. The organisation’s inability to capture this
information will inhibit its ability to prevent crises as this informal system is
an essential transmitter and creator of knowledge around risk. Unfortunately,
the formal processes surrounding risk assessment will often not take account
of these informal networks (as a source of early warning information) as they
sit outside of the structures of observation imposed by the organisation. Thus,
early warnings and weak signals shared within these informal networks will not
be captured by the organisation. In response to these problems and information
asymmetries, many organisations seek to add multiple layers of controls and
build further redundancy into the system in order to prevent failures from
escalating. However, not only can such approaches bring with them problems
around the escalation of risk (through processes of emergence) but they serve
to make the system more opaque and therefore more difficult to manage. These
additional layers of control are also no better able to deal with unobservability.

INFORMAL AND HIDDEN NETWORKS 267

If systems designers and those involved in managerial and accounting control
functions do not consider certain elements to be important then they will remain
marginalised and essentially unobserved. During the horsemeat crisis in the
UK, for example, a senior manager within a large food retailer observed that
the industry does not routinely check for the DNA of some animals and so its
presence or absence is never verified. Many organisational controls are based
on such assumptions. The underlying problem of hidden networks of knowledge
therefore remains.

A NETWORK PERSPECTIVE ON CRISES AND VULNERABILITY

The myriad relationships perpetuated by globalisation and by government
approaches to involving private sector providers in the delivery of public services
mean that all aspects of the design, delivery, management and measurement of
product and service delivery ultimately need to be considered from a network
perspective (Kickert et al., 1997). Organisational performance is deemed to
be improved through the increased flexibility and responsiveness afforded by
carefully designed inter-organisational relationships and by improvements in
the transparency, auditability and governance of information within that process
(de Bruijn, 2007). Other alleged benefits include quicker decision making
processes, improved communications and a reduced emphasis on command and
control. A concomitant focus on core business activities and efficient means of
delivery has frequently resulted in efficient internal and external networks that
allow for ‘just in time’ delivery and lean production. Better integration is thought
to reduce duplication, improve the efficiency of resource allocation and resource
utilisation, and to ensure that decisions are taken close to the consumer, i.e., at
the locus of service provision.

Paradoxically, the same networks that generate these efficiencies for organisa-
tions in terms of the speed of interaction and the extent of the supply chain, also
generate problems. Networks have brought with them the potential for failures
to migrate quickly through the ‘tightly coupled’ and ‘interactively complex’
(Perrow, 1984) nature of the organisation as a system. In this way, ‘just-in-
time’ processes can easily become ‘just-too-late’ (Smith, 2005b) as organisations
no longer have the resource slack that they need to deal with surges in task
demands. The capacity of a regional health authority to respond to a disease
outbreak or a major incident, for example, is often largely contingent on its
resource slack, and the effectiveness of its emergency planning arrangements
with other agencies. Where the communication of information, decision-making,
the utilisation of resources, and the network infrastructures that support them
are inefficient or ill informed, then an existing crisis can escalate quickly across
that system and exceed the capabilities of service providers to deliver what is
necessary despite contingency arrangements (Smith, 2005a).

The central role of public-private supply chain networks within a highly
globalised industry raises some significant challenges for public management

268 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

regulatory systems, especially in a period of intense cutbacks and austerity.
What is clear from a consideration of several crises in recent years is that any
weaknesses in state regulatory systems at the national level can have a major
impact on vulnerabilities within the single market of the European Union. As
this economic trading block increases its membership and given the differential
impacts of the economic downturn across this economic landscape, we should
not be surprised that the various state regulatory agencies differ in terms of
their performance. Clearly, the contamination of the food chain by horsemeat
is indicative of this problem.

The emergence of the breast implant case in late 2011 and early 2012
also illustrated how the interconnected nature of organisations can generate
problems, in this case, arising from unethical behaviours, to have a deleterious
effect on other organisations in the network. The use of non-medical grade
silicone by the French-based company PIP and the subsequent concerns of
women who had them fitted, resulted in a crisis that spread throughout Europe
and internationally (Keogh, 2012). In the UK, the crisis prompted a government
assessment of the safety of PIP implants (Keogh, 2012) and, despite the low level
of calculated risk, there was considerable pressure placed on private providers to
remove implants (O’Dowd, 2011a and 2011b; and Templeton and Follain, 2012).
As many of these implants were part of a cosmetic procedure, they were carried
out privately. For those implants carried out by the NHS, an undertaking was
given to replace them.

Both cases also illustrate the impacts of a de-regulation culture and an
associated erosion of regulatory capability around monitoring and enforcement.
Within an age of austerity, this erosion of regulatory capability can be seen
to decrease the chances of the state being able to detect violations and may,
at the same time, increase the pressures on organisations within the supply
chain to violate in an attempt to maximise profitability. Within such a context,
warnings around violations are more likely to emerge from informal networks
and whistleblowing rather than through inspection regimes. The deaths at
mid-Stafforsdhire hospital serve as an illustration of the failures in regulatory
processes to identify poor performance around patient safety and to learn
effective lessons from such events (Francis, 2010; Ocloo and Fulop, 2012; and
Reid and Catchpole, 2011). Both the PIP and horsemeat contamination examples
also illustrate the role of trust within the regulation of risk across extended
supply chains and networks. At the core of this is how receiving elements within
a supply chain assume that the products received into their own processes meet
the standards required. Invariably, this involves some degree of trust between
members of the supply chain network; often supported by informal relationships
that evolve over time.

The challenge for public management is therefore how to leverage informal
networks when the formal regulatory mechanisms are degraded and how
to understand and manage the informal dimension of inter-organisational
networks so as to minimise their vulnerabilities. Yet our understanding and

INFORMAL AND HIDDEN NETWORKS 269

management of formal and informal networks and network performance is
demanding both conceptually and practically, meaning there is as yet, limited
research-based insight for public managers to draw upon in practice. Attention
has typically been given to aspects of inter-agency collaboration such as
sustaining collaborative effort, achieving collaborative advantage and evalu-
ating the success of such endeavours (Head, 2008; Huxham and Vangen,
2005; Jaaskelainen and Lonnqvist, 2011; and Rodan and Galunic, 2004)
rather than with the management of informal networks and their impact
on the generation and migration of crises across organisations, spaces and
places.

Socio-technical networks generally, and informal networks in particular, are
not routinely seen as a source of vulnerability and much of the literature
emphasises the benefits derived from social interactions and relationships.
These include the rapid dissemination of information, the communication of
tacit knowledge, potential improvements in organisational performance, and the
ability to quickly galvanize interest and support where networks are supported
by communications structures (Borgatti and Foster, 2003; and Gnyawali and
Madhavan, 2001).

There is, therefore, a double-edged aspect to socio-technical networks: they
can both allow risks to escalate and can provide organisations with a degree
of resilience around crisis prevention. The more resilient an organisation can
become, the more effective it should be in picking up on, and dealing with, early
warnings. It becomes important therefore to understand how such hazards,
and the risk of these hazards, can be affected by, and also affect, socio-
technical networks within and between organisations. However, as we go on
now to explore, much of the interaction within socio-technical networks is
informal and frequently hidden presenting significant challenges to managers
and accountants seeking to ensure transparency, probity and accountability.

HIDDEN AND INFORMAL NETWORKS

Networks transcend formal organisational boundaries and formal means of
observation and control. They are also usually characterised by elaborated codes
(Bernstein, 1966) representing the language used by expert groups within the
network. These codes are often impenetrable by those outside of the expert
group and serve as a barrier to discourse. At its core, knowledge is constructed
(or rejected) as a function of how we make sense of what we ‘observe’ in the
world around us (Weick, 2001; and Weick and Sutcliffe, 2001). We tend to select
or accept information that suits our needs, and that we recognise as relevant
to our interests (Boisot, 1995; Collingridge and Reeve, 1986; and Taylor, 2000).
In part, this sensemaking process is shaped by the values and core beliefs that
we hold. For example, in a healthcare setting, clinical staff may readily identify
and accept information that reinforces their views on particular approaches to
patient care, but be much less receptive to (and thus pay less attention to)

270 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

information about cost, purchasing options or managerial incentives. As Powell
observes:

The most useful information is rarely that which flows down the formal chain of
command in an organisation or that which can be inferred from shifting price signals.
Rather, it is that which is obtained from someone whom you have dealt with in the
past and found to be reliable. You trust best information that comes from someone
you know well (Powell, 1991).

Thus, informal networks may become powerful conduits of knowledge that is
often deemed to supersede or negate organisationally-produced knowledge. Such
exchanges are, however, largely hidden and thus evade the normal management
and control processes within organisations.

Seidl (2007) argues that observation and knowledge are linked but they are
not the same thing:

. . . knowledge is something that guides observation. That is, it is something that in
the concrete moments of observation provides an orientation for where to draw the
distinction. In that sense, we can parallel knowledge with structures of observation (Seidl,
2007, p.19).

How we define and frame a problem will largely determine how we observe and
perceive it and this will, in turn, shape our response to it. Informal networks can,
however, allow for ‘non-knowledge’ (Seidl, 2007) to be challenged, as evidence
from other contexts and other perspectives is brought to bear on the constrained
observations that are codified within organisations. Professional bodies are a key
conduit for this process as they provide a range of mechanisms for information
sharing and networking. The issue then becomes one of whether the organisation
absorbs and responds to this knowledge. The interactions between individuals
generate a set of connecting fabrics that both exist, and are perpetuated beyond,
the control and sphere of any single organisation.

In these ‘spaces’, knowledge is created and disseminated and serves to shape
the views and behaviours of individuals within the network. This, in turn, creates
social capital and knowledge that is the possession of the individual (and the
network) and not, necessarily, their employer. Not all of this information is
necessarily actionable. For example, local authority education staff who deal
with vulnerable children come to know the children’s circumstances well, often
develop informal ties with staff in related agencies such as healthcare, social
care, schools and the police. This is particularly the case around those families
where there are anti-social behaviour or addiction problems such that families
are brought into contact with multiple agencies. During informal exchanges,
background information is often passed between individuals that is not officially
permissible (due to client confidentiality) but which front line staff value and
deem necessary to effectively undertaking their role. Such communications can
result in interventions (under other auspices) that avert a potential crisis. It
is also conceivable though that within the network space there is also the

INFORMAL AND HIDDEN NETWORKS 271

potential for disinformation and failure as the knowledge communicated may
be inaccurate, decontextualized, or out of date, thereby leading to inappropriate
actions. Such failures can migrate quickly and create multiple ‘pathways of
vulnerability’ (Smith, 2005b) in which the potential for failure can be embedded
and remain undetected across a range of connected organisations. These
pathways are an extension of Turner’s (1976 and 1978) notion of incubation and
Reason’s (1990) resident pathogens by elevating the importance of space, place
and time in both the generation of failure (failure modes and probabilities)
and its ‘complexion’ (failure consequences and cascades). If we consider the
failures that can be generated within (supply chain) networks then it is possible
to see organisations as having multiple ‘pathways of vulnerability’ embedded
within their sphere of operations. Many of these pathways will originate outside
of the organisation’s formal boundaries but will have consequences within
them. Informal networks are, therefore, an important but essentially neglected
element of an organisation’s risk portfolio as there is a largely under-explored
‘dark side’ to them.

DECISION MAKING: DEVELOPING CONTINGENCIES AND MANAGING CRISES

The managerial limitations we have highlighted so far create both intra- and
inter-organisational vulnerabilities. The gaps in knowledge combined with an
inability to observe and control much of the communication and knowledge
concerning technical and non-technical issues, will serve to create holes in
organisational defences. Reason (1990) argues that these gaps may become
aligned with gaps in other parts of the organisation, creating vulnerabilities at a
number of levels within the organisation. Where gaps become aligned due to the
range of issues noted previously with regards to information, communication,
error reporting behaviours, hierarchy and so forth, then latent error pathways
are created such that hazards can permeate through the organisation(s) and its
networks, thereby creating significant losses in terms of control, reputation, and
service provision. At its worst in a healthcare context, this means an adverse
event in hospital, failure to respond to a community crisis on time, poor diagnosis
and inappropriate pathways of care or the death of a patient or innocent victim
(Fischbacher-Smith and Fischbacher-Smith, 2009). A multi-agency network thus
potentially incubates a significant risk of destabilising a number of organisations
simultaneously or in a domino effect. As a consequence of these non-observed
networks, there will be information about the various risks that are generated
as part of the organisation’s activities that is not captured by managerial control
systems i.e., through the formal processes. The essential issue here is that at
any point in time, the risks that are identified and measured within a formal
process will represent only a proportion of the hazards that are faced by the
organisation.

There are important implications for contingency planning given this line
of argument. Organisations’ contingency planning processes will generally be

272 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

based on the formal interactions that are measured and managed. Senior staff
who typically develop contingency responses, will rely on formal information and
data analysis to calculate capacity and to determine a portfolio of risks, typically
informed by a local risk register. Informal communications amongst those who
deliver services, may present quite different accounts of capacity, knowledge,
understanding, decision making and communication pathways that will render
some contingency planning assumptions invalid. This means conditions may
arise that move the organisation beyond its contingency limits and outside
of the scope of the plans that are put into place to deal with serious
adverse events (Smith, 2005a). Thus, although it is often assumed that the
identification of risk and the development of associated contingency plans
is largely sufficient to deal with any ensuing crisis or hazardous situation,
it is more likely to be the case that there will be various circumstances in
which this proves to be a grossly inadequate assumption. It is not unlikely
given our argument above, that a healthcare provider would quickly find that
many of its assumptions were inadequate during contingency planning activities
and that a crisis situation therefore quickly escalates beyond the contingency
limits. Moreover, given the networked nature of organisations, as the PIP case
illustrates, events combine and create emergent conditions that are unexpected
and uncontrolled, taking the organisation(s) beyond anticipated and controlled
limits.

It is at this point that we again recognise the dual role of informal networks.
When the organisation is dealing with issues that have been anticipated and
are within the scope of the contingency response, they will marshal teams of
staff, commandeer equipment and take up residence in premises within their
control centres to house crisis teams. The level of mobilisation will vary between
organisations and there will be a concerted process of monitoring and evaluation
that is aimed at preventing the ‘event’ from escalating further (Smith, 2000 and
2004). The extent of this crisis management process will, of course also be
shaped by the ‘structures of observation’ (Seidl, 2007) that are in place. At
this stage, one of two things may occur. The event may escalate but nonetheless
retain certain characterstics that are conceivable within the dominant paradigm,
although this does not make them readily manageable. It is also the case,
however, that scenarios may occur that challenge the dominant paradigm within
the organisation. They may not have been accepted by management prior to
the crisis (e.g., the idea that NHS doctors might commit a terrorist attack),
as the evidence-base to support such a challenge had not been accumulated
by the formal processes. In both situations, informal networks can play an
important role in allowing crisis management team members to leverage the
knowledge and resource bases that exist within their informal networks and
to alleviate the crisis, preventing further escalation. These informal networks
could provide management with (indirect) access to expertise and knowledge
held by people outside of the formal crisis teams. A key consideration will also
be the ability of informal networks to challenge the organisational paradigm

INFORMAL AND HIDDEN NETWORKS 273

following the event. It will be interesting to see how the medical devices sector
responds in the wake of the PIP case and increasing calls for a tighter regulatory
enforcement regime.

HUMAN NETWORK CHALLENGES TO MANAGERIAL CONTROL

How organisations manage the knowledge that is present within their control,
and how they deal with the more informally generated knowledge that exists
within the hidden networks that permeate the organisation is an essential
consideration. It is increasingly the case that organisations must be sensitive
to both internal and external signals, and as a consequence must find a
means of capturing information throughout and beyond the organisation. An
effective transfer of knowledge between organisational members, along with
the challenges made to core assumptions in the process, should allow for a
more effective crisis response capability, especially around early warnings. Such
a perspective invariably takes the view that the essential knowledge needed
to run the organisation is distributed across the organisation and is not just
concentrated at the senior management level of the organisation.

Another important aspect of informal, hidden networks is that highly sensitive
information that is essential to organisational performance may find more
opportunities for ‘leakage’ or, in some cases, early warnings of problems might
not be picked up by those who are in a position to take action to prevent
escalation. The development and maintenance of lines of communication
between members of the organisation, needs therefore, to be a key focus of
managerial attention. Whilst many organisations would agree with this, there
are several important barriers to effective implementation, especially when
dealing with issues around risk.

Firstly, risk assessment by its very nature involves predicting the likelihood
of an event occurring and taking subsequent steps to mitigate those risks.
Prediction is based on both known and unknown factors, and thus the
organisation’s ability to capture relevant information and make informed
judgements on which to base their predictions, becomes essential. Much of this
information is, however, complex and requires interpretation and analysis by
experts. Much of it also lies within the zone of unobservability, exchanged within
hidden networks. This interpretation may, under certain conditions, generate
the potential for future risks as the decisions taken on the basis of a flawed
perspective will serve to shape the control methods put into place.

A second issue, and one that is also important in relation to issues
of expertise, is the hierarchy within which information is collated, shared,
analysed and disseminated. If error reporting is initiated by a relatively junior
member of staff within an organisation that is characterised by professional
hierarchy, then the problems of authority gradients can be a significant
factor in preventing information flows and subsequent action. Such hierarchies
are common to a range of industries such as healthcare, engineering and

274 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

airlines. In some circumstances the power-dynamics within organisations can
mean that errors are either not reported (as frontline, junior, staff may
feel unable to challenge higher level decisions), or are ignored because the
reporter is deemed to be inexperienced or a non-expert. Yet again, the issues
will commonly be well-known and communicated among informal but hidden
networks.

A third issue concerns the problem associated with constrained boundaries
of consideration amongst decision makers who tend not to consider issues
beyond the short term. They prioritise the requirement to deal with immediate
problems at the expense of the possible long-term cost. These factors, combined
with the issues around determining the legitimacy of knowledge and the social
construction of risks, generate challenges to the ways in which organisations
deal with risk and crisis. The problem becomes compounded when we consider
the impact of such problems across the multi-organisational networks that
characterise public services such as health and social care. What is less
comprehensively acknowledged is the significance that these issues will have
within the wider inter-organisational context in which both risk and crisis
occur and are transmitted (Smith and Irwin, 2006). A crisis may no longer be
confined to one organisation and there is a clear potential inter-agency effect as
organisations become more tightly coupled (Perrow, 1984) to each other through
complex supply chain networks. What is becoming increasingly clear as a result
is:

that in a highly interconnected world, the actions of other organisations may also play
an important role in the development and migration of crisis potential (Smith and
Barton, 2007, p. 65).

Thus, it is also the case that the ability of one organisation to respond to a
crisis situation will potentially enable or disable others within the network, as
supply and value chains generate the potential for common mode failures or as
critical national and international infrastructures become vulnerable to external
attack and failures (Boin and Smith, 2006). The issues here also relate to the
limits of managerial control across boundaries and to the interaction effects of
one organisation’s performance on another under conditions of crisis. The latter
relates very much to the collective capacity of inter-connected organisations –
the ability to perform in what Kauffman terms a ‘fitness landscape’ (Kauffman,
1993), but such issues go beyond the scope of this paper.

CONCLUSIONS

Our aim in this paper has been to set out the problem space for information
capture and analysis within organisations. We have tried to frame the
information terrain in terms of what is measured (because that is invariably
what is managed) and what is unobserved. It is these unobserved spaces that
generate the dark territory within organisations and which serve to allow crises

INFORMAL AND HIDDEN NETWORKS 275

to be generated. In the crisis of legitimation that follows every crisis, it is
invariably the unobserved aspects of the organisation that are held up as key
factors in shaping the evolution and escalation of the crisis. Often these issues,
unobservable interactions and knowledge exchanges will have conveyed some
form of early warning but the warning will have been missed or rejected as
having little or no importance in determining organisational performance. The
concerns expressed within informal networks are thus strangled at birth by
a formal system that both fails to recognise their significance and is almost
incapable of dealing with them because no structures and processes are available
to ‘manage’ them. Even after a crisis, organisations often display a degree of
paradigm blindness towards the issues (Fischbacher-Smith, 2012).

Organisations embody informal relationships that are beyond their physical,
political, economic, and managerial boundaries. They are, therefore beyond man-
agerial control and yet significantly influence organisations acting individually
and collectively. Although informal networks are hugely beneficial in terms of
organisational performance, especially in complex systems such as healthcare,
the problems associated with structures of observation are significant. They are
also likely to be compounded across organisational boundaries, yet there has been
relatively little consideration of how informal networks may have the capacity
for self-harm through quickly transmitting errors via uncontrolled social means
of communication. Similarly, there has been little attention on how they might
create vulnerabilities for the organisations who are embedded within a set of
tightly-coupled linkages.

As economies move increasingly towards mixed forms of public, private and
third sector provision of public services, it is essential that this interconnectivity
is recognised and understood. Given that organisations will seek to perform at
optimal levels, their ability to identify and manage error or hazard potential
is crucial. In their attempts to do so, informal networks become significant to
the performance of individual organisations. Where network communications
are inadequate, informal networks will exacerbate individual organisations’
vulnerabilities such that the network as a whole contains penetrable layers
of vulnerability.

This paper has argued that the limits to managerial control within organ-
isations are such that the informal networks between individuals within and
across organisations may serve to bypass established internal systems designed
to reduce the organisation’s vulnerability to external hazard. The challenge
for professionals and managers within organisations is, therefore, to recognise
and reconceptualise the destructive capacity of informal networks (the ‘dark’
side of networks), particularly in light of the non-knowledge or unobservable
transmission of information that is nonetheless strategically and operationally
essential to organisations in terms of protection and mitigation of risk. The
argument is not intended to negate the role of managers or to suggest that efforts
to identify and manage a risk portfolio are fruitless. Rather, we propose that
the mindset towards sources of risk be adapted to recognise the vulnerabilities

276 FISCHBACHER-SMITH AND FISCHBACHER-SMITH

that (could) exist within an organisation’s set of network linkages. Moreover,
we suggest that managers recognise the vulnerabilities generated due to non-
knowledge such that greater awareness is created within organisations of the
potential for informal networks to identify and generate risk. We also argue
that in considering organisational responses to crisis situations, that crisis
management strategies take more conscious account of the inter-dependence of
organisations, and the extent to which the underperformance of one organisation
within the network, may be detrimental to the survival of others.

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